NanoBit Crypto Scam: SEC Wins $5.52M Judgment

The U.S. Securities and Exchange Commission won a default judgment against the operators of NanoBit, a crypto investment scam that ran from September 2023 to June 2024. A federal court in Brooklyn ordered $5.52 million in penalties.

The SEC said scammers used WhatsApp to contact victims and lure them into fake initial coin offerings that promised unusually high returns. NanoBit claimed its affiliate, NanobitUS Securities, was an SEC-registered broker. No real trades ever took place.

Judge Sanket J. Bulsara entered the judgment after none of the defendants responded to the lawsuit. In his ruling, Bulsara said investors' funds went to scheme participants who wired more than $2 million to accounts in Hong Kong and misappropriated hundreds of thousands of dollars in crypto.

The court permanently barred NanoBit and four other entities – Radiant Horizons Limited, Sweet Karma Fashion Inc., and Zhao Tropical Deli Inc. – from violating anti-fraud provisions of U.S. securities laws. Two individuals, Jiajie Liu and Hua Zhao, face the same ban.

The biggest penalty fell on NanoBit itself: roughly $1.8 million. Radiant Horizons, Sweet Karma, and Zhao Deli each owe more than $1.18 million. The total includes disgorgement of illicit profits and civil penalties, with pre-judgment interest added.

"The defendants' default is willful," Bulsara wrote. "Because of the default, no meritorious defense has been presented to the Court."