A federal judge in New York has entered a $5.5 million default judgment against NanoBit Limited and five related defendants for an alleged relationship investing scam built on a fake cryptocurrency trading platform.
The U.S. District Court for the Eastern District of New York on June 16 ordered a combined restitution of $5,518,902, prejudgment interest and civil penalties, the U.S. Securities and Exchange Commission (SEC) announced.
The agency alleged that between September 2023 and June 2024, program participants posed as financial industry professionals in WhatsApp groups, established trust with investors, and then asked them to deposit funds into NanoBit.
Although user dashboards show what appear to be profitable trades, the SEC claimed that the platform has never executed crypto trades. At least 18 investors lost nearly $1 million in cryptocurrency and fiat currency, according to the SEC complaint.
The investors’ funds were not used for trading purposes, but were instead paid into bank accounts in Hong Kong, the SEC said. Participants transferred more than $2 million overseas and misappropriated hundreds of thousands of dollars of crypto assets from investors.
NanoBit also falsely claimed that an affiliated company, NanobitUS Securities, was registered with the SEC and linked to reputable financial firms.
