SEC secures $5.4 million judgment against NanoBit in crypto fraud

The U.S. District Court for the Eastern District of New York entered final judgments on June 16 in a fraud case brought by the Securities and Exchange Commission, resulting in roughly $5.4 million in penalties and disgorgement against NanoBit Limited, three affiliated entities and an individual tied to the scheme.

The court found that NanoBit and related entities violated U.S. securities laws and issued permanent injunctions barring the defendants from issuing, buying or selling securities. NanoBit was ordered to pay about $1.18 million in civil penalties, more than $532,000 in disgorgement and roughly $81,200 in prejudgment interest, totaling nearly $1.8 million. Affiliates Radiant Horizons, Sweet Karma and Zhao Deli were each assessed $1.18 million, and one principal, Jiajie Liu, was ordered to pay about $120,000, bringing the total judgment to about $5.4 million.

In a complaint filed in September 2024, the SEC alleged that NanoBit’s operators recruited investors on social media and added them to WhatsApp groups where impersonators posed as financial professionals. Prospective investors were shown a fabricated dashboard that depicted rising returns and were told an affiliate, NanobitUS Securities, was an SEC-registered broker. The complaint also says the defendants promoted fake initial coin offerings that promised large returns.

The SEC alleged no trades occurred on the NanoBit platform and that investor deposits were diverted to participants in the scheme. Scheme participants allegedly wired more than $2 million to bank accounts in Hong Kong and misappropriated hundreds of thousands of dollars in investors’ crypto assets. Investors who tried to withdraw funds were met with excuses, asked to pay large fees, or removed from the messaging groups after questioning the platform’s legitimacy.

The NanoBit judgment is among recent SEC enforcement actions targeting crypto-related fraud. In late May the agency charged a man in Texas accused of raising over $12 million by falsely promising returns from AI trading bots. In April the SEC charged a crypto executive and two companies for raising about $16 million through false claims tied to a token called Bitcoin Latinum.

The SEC’s orders require disgorgement of ill-gotten gains, civil penalties and permanent injunctions intended to bar future securities activity and to facilitate recovery of funds tied to the scheme.