SEC Secures $5.52M Judgment Against NanoBit Crypto Fraud Operation
The U.S. Securities and Exchange Commission has successfully concluded its legal battle against NanoBit, a fraudulent cryptocurrency operation that exploited unsuspecting investors through sophisticated deception tactics. The case marks a significant regulatory win in the ongoing fight against digital asset fraud.
Between September 2023 and June 2024, NanoBit and its associated entities allegedly orchestrated what is commonly known as a 'pig butchering' scheme — a type of fraud where criminals build trust with victims over time before persuading them to invest in fake platforms. Scammers made initial contact through popular messaging applications, including WhatsApp, carefully cultivating relationships before moving in for the financial kill.
To establish credibility, NanoBit promoted fraudulent cryptocurrency initial coin offerings that dangled promises of extraordinarily high returns. The operation went even further in its deception by falsely claiming that NanobitUS Securities, its supposed affiliate, held official SEC-registered broker status — a fabrication designed to eliminate investor suspicion.
The U.S. District Court for the Eastern District of New York issued a final judgment on June 15, with the SEC formally announcing its victory on June 29. The ruling targeted two individuals — Jiajie Liu and Hua Zhao — along with four organizations: NanoBit, Radiant Horizons Limited, Sweet Karma Fashion Inc., and Zhao Tropical Deli Inc. All parties faced consequences for failing to respond to the regulator's legal action.
District Judge Sanket J. Bulsara made clear the full extent of the misconduct, stating that no actual transactions ever occurred on the NanoBit platform. Instead, investors' funds were funneled directly to scheme participants, who transferred more than $2 million to bank accounts based in Hong Kong while also misappropriating hundreds of thousands of dollars' worth of victims' crypto assets.
The court's final ruling imposed a permanent injunction prohibiting all defendants from violating anti-fraud provisions embedded in U.S. securities laws. Financial penalties totaling approximately $5.52 million were also ordered, encompassing disgorgement of illegal profits, pre-judgment interest, and civil penalties intended to punish wrongdoing and deter similar misconduct in the future.
NanoBit received the steepest individual penalty, facing a repayment obligation of roughly $1.8 million. Radiant Horizons Limited, Sweet Karma Fashion Inc., and Zhao Tropical Deli Inc. were each ordered to pay over $1.18 million.
Judge Bulsara emphasized the deliberate nature of the defendants' inaction, noting that their default was willful and that no legitimate defense had been presented to the court. He further stressed that failing to enter default would have placed an unfair burden on the SEC.
This case underscores the growing threat of pig butchering scams targeting crypto investors globally, and highlights the SEC's commitment to pursuing fraudulent actors who exploit digital financial markets for personal gain.
