The U.S. Securities and Exchange Commission (SEC) has finally won its case against NanoBit. For context, the SEC alleged that between September 2023 and June 2024, the defendants ran a ‘pig butchering’ scheme. To gain victims’ trust and lure them into investing in NanoBit, scammers reportedly used messaging apps such as WhatsApp to make contact.
In fact, to appear legitimate, NanoBit advertised phony cryptocurrency initial coin offerings that promised unusually high returns. The company also falsely claimed that its affiliate, NanobitUS Securities, was an SEC-registered broker.
On what grounds did the SEC win against NanoBit?
On the 29th of June, the SEC announced its victory. The announcement came nearly two weeks after the U.S. District Court for the Eastern District of New York issued a final judgment against two people and four organizations connected to the NanoBit fraud case.
Remarking on the same, Sanket J. Bulsara, United States District Judge, claimed,
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.
In addition to NanoBit, SEC also prevailed against Radiant Horizons Limited, Sweet Karma Fashion Inc., and Zhao Tropical Deli Inc. Moreover, two people, including Jiajie Liu and Hua Zhao, were also included for their failure to reply to the regulator’s lawsuit.
Taking things into consideration, the court’s final ruling included a permanent ban on all defendants breaking important anti-fraud clauses in U.S. securities laws.
Fine imposed on NanoBit and others
Consequently, the defendants were ordered to pay a total of nearly $5.52 million in financial penalties. This included pre-judgment interest to compensate for the time they held the illicit gains, civil penalties meant to punish and deter future misconduct, and disgorgement, which requires them to surrender profits obtained through illegal conduct.
Needless to say, the biggest fine was imposed on NanoBit, which owed roughly $1.8 million. Whereas, on the other hand, Radiant Horizons, Sweet Karma, and Zhao Deli were all required to pay more than $1.18 million.
Concluding the judgment, Judge Bulsara added,
The Defendants’ default is willful; because of the default, no meritorious defense has been presented to the Court; and because there is no alternative to obtain the relief sought, the SEC would suffer unfair prejudice if default were not entered.
Final Summary
- NanoBit used fake cryptocurrency initial coin offerings as tactics to gain victims’ trust.
- The defendants have been ordered to pay a total of nearly $5.52 million in financial penalties.
