SEC wraps up NanoBit crypto fraud case in final judgment, ordering over $5 million in fines

The Securities and Exchange Commission resolved its case against NanoBit after alleging the crypto platform lied to investors and stole their money in what the agency described at the time as its first enforcement action involving relationship investment scams.

The SEC announced the final judgment on Monday, ending a case it filed in September 2024 during the Biden administration.

The agency alleged that from September 2023 through June 2024, NanoBit and others involved in the scheme posed as financial professionals in WhatsApp groups to gain investors' trust. They then encouraged investors to invest in NanoBit and said its affiliate was an SEC-registered broker, which it was not, the SEC said. 

"The supposed financial professionals allegedly then promoted fake initial coin offerings as a way for the investors to make substantial returns," the SEC said. "But, as alleged, no transactions took place on the NanoBit platform and investors' funds in fact went to scheme participants who wired more than $2 million to bank accounts in Hong Kong and misappropriated hundreds of thousands of dollars' worth of investors' crypto assets."

Under the final judgment, the defendants involved were ordered to pay over $5 million in fines, according to the SEC's statement. The agency also highlighted an investor alert warning that fraudsters use social media and messaging apps to carry out investment scams.