- The SEC got a $5.4 million judgment after charging NanoBit with operating a fraudulent crypto investment platform.
- According to the regulators, NanoBit operators defrauded investors by making use of fake dashboards and fraudulent claims to lure investors.
The United States Securities and Exchange Commission managed to secure a major victory in court against NanoBit. The SEC secured the judgment after investigating a long-term cryptocurrency fraud. The judgment follows a long-running case concerning fraudulent cryptocurrency trading schemes operated by NanoBit.
The judgment by the United States District Court for New York was made against multiple parties on June 16. According to regulators, NanoBit operators carried out deceptive cryptocurrency investment schemes. Mostly against investors in the period 2023-2024 on social media platforms.
SEC Details the Scheme
The SEC alleged that the defendants pretended to be financial experts in WhatsApp groups. They lured investors to send cryptocurrency and cash. However, instead of using the investor funds for investment purposes, the defendants transferred the money directly to individuals participating in the scam.
Moreover, the SEC alleged that NanoBit posed as a reputable cryptocurrency investment platform, which displayed false balances and returns. The false dashboard created the impression that the investors were making a profit. This happened consistently without any cryptocurrency trading on the platform.
The investigators also alleged that NanoBit falsely advertised itself as an affiliate of NanobitUS Securities. And it claimed the company was an SEC-registered broker while providing fake initial coin offerings. These claims misled more victims to invest because they wanted to access cryptocurrency through financial services.
Financial Penalties and Permanent Ban by Court Order
As per the order of the court, NanoBit will have to pay around $1.8 million as civil penalties, disgorgement, and prejudgment interest after judgment. The court imposed separate civil penalties of $1.18 million on NanoBit affiliates Radiant Horizons, Sweet Karma, and Zhao Deli.
Jiajie Liu, who is one of the main organizers of this scam, was also fined about $120,000 in penalties and interest. The regulatory authorities were also successful in imposing permanent injunctions on all defendants not to take part in any future securities offerings or securities-related investments.
It was reported that NanoBit deposited more than $2 million in their bank accounts located in Hong Kong through the scam process. It was also revealed by the investigators that the operators used several thousand dollars worth of cryptocurrencies from the victims of this fraud.
As per the reports, there were restrictions on withdrawal for all the investors trying to withdraw the deposited funds or their account balance. Operators had reportedly insisted on more payments from the victims prior to withdrawing their funds and also removed people asking doubts regarding their platform from their WhatsApp group. This case reflects yet another crypto fraud case enforced by the regulatory authorities.
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