SEC Secures $5.5M Judgment in NanoBit Fake Crypto Platform Case

Here’s a clear, professional paraphrased version:

The group cultivated investor trust through WhatsApp before diverting funds to bank accounts in Hong Kong, rather than carrying out any legitimate crypto trades.

A federal judge in New York issued a $5.5 million default judgment against NanoBit Limited and five associated defendants in connection with an alleged relationship-based investment scam involving a fraudulent crypto platform.

On June 16, the U.S. District Court for the Eastern District of New York ordered a total of $5,518,902 in disgorgement, prejudgment interest, and civil penalties, according to the U.S. Securities and Exchange Commission (SEC).

The SEC alleged that between September 2023 and June 2024, individuals behind the scheme impersonated financial professionals in WhatsApp groups, built credibility with investors, and encouraged them to deposit funds into NanoBit.

Although users were shown dashboards indicating profitable trades, the SEC stated that no actual crypto transactions ever took place. At least 18 investors collectively lost close to $1 million in both crypto and fiat assets, according to the complaint.

Instead of being used for trading, investor funds were funneled into Hong Kong bank accounts. More than $2 million was reportedly transferred offshore, with hundreds of thousands of dollars in crypto assets misappropriated.

NanoBit also falsely claimed that an affiliated entity, NanobitUS Securities, was registered with the SEC and connected to well-known financial institutions.

The defendants—NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, and Hua Zhao—failed to appear in court. The judge determined the default was intentional and found no valid defense.

NanoBit Limited faces the largest financial penalties, including over $532,000 in disgorgement, nearly $82,000 in interest, and a $1.1 million civil penalty. The other three corporate entities were each fined $1.1 million. Liu was ordered to pay $120,000, while Zhao must pay $55,000, with all payments due within 30 days.

The court also permanently barred all six defendants from violating federal anti-fraud laws and from participating in securities offerings or transactions. However, Liu and Zhao are still permitted to trade in their personal accounts.

The SEC initially filed the complaint in September 2024, alongside a related case targeting another alleged fake platform, CoinW6. Both cases were described as among the agency’s first enforcement actions addressing relationship-investment scams involving fraudulent crypto platforms. A seventh defendant, Fei Liao, was named in the original complaint but was not included in the default judgment.