Key Takeaways
- • SEC secured a final default judgment on June 16, 2026, against NanoBit Limited and five linked defendants, ordering total payments of approximately $5.52 million in disgorgement, prejudgment interest, and civil penalties.
- • NanoBit operated as a fraudulent cryptocurrency trading platform that targeted investors through WhatsApp groups after initial recruitment via social media, with scheme participants falsely posing as licensed financial professionals.
- • The SEC alleged that no actual transactions occurred on the NanoBit platform; instead, investor funds exceeding $2 million were diverted directly to scheme participants, while fake trading screens displayed fabricated account balances and market activity.
- • Defendants were ordered to pay $532,649 in disgorgement, $81,957 in prejudgment interest, and $1,182,251 in civil penalties, with four entities and two individuals held jointly and severally liable.
- • This case represents the SEC's first successful enforcement action against a relationship-scam-based cryptocurrency fraud scheme, demonstrating continued regulatory focus on crypto platform deception despite broader industry movement toward standardized rulemaking.
Summary
The U.S. Securities and Exchange Commission has concluded its enforcement action against NanoBit Limited and affiliated defendants with a decisive default judgment entered by the U.S. District Court for the Eastern District of New York on June 16, 2026. The court ordered the defendants—NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, and Hua Zhao—to pay total damages and penalties of approximately $5.52 million. The judgment specifically mandated $532,649 in disgorgement of ill-gotten gains, $81,957 in prejudgment interest, and $1,182,251 in civil penalties.
The SEC's complaint, originally filed in September 2024, alleged that NanoBit operated as a counterfeit cryptocurrency trading platform designed to defraud investors through a coordinated scheme. Scheme operators recruited targets via social media before transitioning them into WhatsApp group conversations, where individuals posing as registered financial professionals built relationships and trust with victims. The defendants falsely represented that an affiliate entity, NanobitUS Securities, held SEC registration status. Participants promoted fabricated initial coin offerings and presented NanoBit as a legitimate, functional trading venue equipped with real-time pricing data, account balances, and transaction histories.
According to the SEC's allegations and court findings, the entire operation was a facade. No actual cryptocurrency transactions were executed on the NanoBit platform. Instead, investor funds—totaling more than $2 million—were wired directly to scheme participants and diverted for personal use. The fake trading screens shown to investors were designed solely to create the illusion of legitimate trading activity and platform functionality, sustaining investor confidence while capital flowed to the perpetrators.
The June 2026 judgment marks the SEC's first successful enforcement action against a relationship-scam variant targeting cryptocurrency investors, highlighting the regulator's expanding focus on romance and trust-based fraud schemes within digital asset markets. The case underscores persistent vulnerabilities in retail investor protection, particularly among those targeted through informal social channels. Although the broader cryptocurrency industry continues moving toward regulatory clarity and standardized compliance frameworks, enforcement actions like NanoBit demonstrate that fraudulent operations exploiting trust-building tactics remain a significant enforcement priority for the SEC.
The SEC's complaint, originally filed in September 2024, alleged that NanoBit operated as a counterfeit cryptocurrency trading platform designed to defraud investors through a coordinated scheme. Scheme operators recruited targets via social media before transitioning them into WhatsApp group conversations, where individuals posing as registered financial professionals built relationships and trust with victims. The defendants falsely represented that an affiliate entity, NanobitUS Securities, held SEC registration status. Participants promoted fabricated initial coin offerings and presented NanoBit as a legitimate, functional trading venue equipped with real-time pricing data, account balances, and transaction histories.
According to the SEC's allegations and court findings, the entire operation was a facade. No actual cryptocurrency transactions were executed on the NanoBit platform. Instead, investor funds—totaling more than $2 million—were wired directly to scheme participants and diverted for personal use. The fake trading screens shown to investors were designed solely to create the illusion of legitimate trading activity and platform functionality, sustaining investor confidence while capital flowed to the perpetrators.
The June 2026 judgment marks the SEC's first successful enforcement action against a relationship-scam variant targeting cryptocurrency investors, highlighting the regulator's expanding focus on romance and trust-based fraud schemes within digital asset markets. The case underscores persistent vulnerabilities in retail investor protection, particularly among those targeted through informal social channels. Although the broader cryptocurrency industry continues moving toward regulatory clarity and standardized compliance frameworks, enforcement actions like NanoBit demonstrate that fraudulent operations exploiting trust-building tactics remain a significant enforcement priority for the SEC.
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