The U.S. Securities and Exchange Commission secured a $5.5 million default judgment against NanoBit Limited and five related defendants for allegedly running a relationship-investment scam that used a fake crypto trading platform to defraud at least 18 investors, according to an SEC announcement.

Market Context

The enforcement action marks one of the first major victories by U.S. regulators targeting "pig-butchering" schemes involving fabricated cryptocurrency platforms. These scams have proliferated across global markets as retail adoption of digital assets has accelerated, creating new attack vectors for bad actors exploiting trust-based relationships.

The NanoBit case ran concurrently alongside a parallel SEC action against another fake platform called CoinW6, both filed in September 2024 as part of the agency's early push to combat relationship-investment fraud in the crypto space. The default judgment was entered June 16 by the U.S. District Court for the Eastern District of New York.

Analysis

The scheme operated from approximately September 2023 through June 2024, according to SEC allegations. Participants posed as financial-industry professionals in WhatsApp groups, building rapport with potential investors before directing them to deposit funds into the NanoBit platform. The trading dashboards displayed apparently profitable positions, creating an illusion of legitimate market activity.

However, the SEC alleged that NanoBit never executed any actual cryptocurrency transactions. Instead, investor funds were diverted to bank accounts in Hong Kong, with more than $2 million wired offshore and hundreds of thousands of dollars in crypto assets misappropriated, according to the complaint.

The defendants—NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, and Hua Zhao—failed to appear in court proceedings. The judge found the default to be willful with no meritorious defense presented. NanoBit also falsely claimed its affiliate, NanobitUS Securities, was SEC-registered and connected to reputable financial firms.

Key Numbers

-$5,518,902: Total judgment amount including disgorgement, prejudgment interest, and civil penalties

-18: Number of investors identified as victims in the SEC complaint

-Nearly $1 million: Estimated investor losses in crypto and fiat currency

-$2 million+: Amount wired offshore by scheme participants

-$532,000+: Disgorgement owed by NanoBit Limited alone

-$1.1 million: Civil penalty assessed against NanoBit Limited

What to Watch

The court ordered all defendants to pay within 30 days of the June 16 judgment. The permanent injunction bars all six defendants from violating federal anti-fraud provisions and from participating in securities offerings or transactions. Liu and Zhao retain the ability to trade in their personal accounts.

A seventh defendant named in the original September 2024 complaint, Fei Liao, was not included in this default judgment and may face separate proceedings. The SEC's broader enforcement campaign against relationship-investment scams using fake crypto platforms remains ongoing.