Court orders $5.5 M penalty in SEC NanoBit crypto case

A federal court has ordered a group of companies and individuals behind the purported cryptocurrency platform NanoBit to pay more than $5.5 million in penalties and restitution, concluding a U.S. Securities and Exchange Commission fraud case. The U.S. District Court for the Eastern District of New York entered the final judgment on June 16, nearly two years after the SEC filed its initial complaint.

The SEC alleged that NanoBit Limited, along with affiliated entities Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., and individuals Jiajie Liu and Hua Zhao, operated a fraudulent investment scheme between 2023 and 2024. The scheme allegedly used social media platforms like Instagram to recruit at least 18 investors before moving them into private WhatsApp groups. Within these groups, participants posed as financial professionals to build trust and promote the platform.

According to the regulator, the defendants falsely claimed that an affiliate, NanobitUS Securities, was registered with the SEC. They promoted fake initial coin offerings and presented NanoBit as a functional trading venue, showing investors dashboards that displayed fabricated crypto...