SEC Accuses Fake Crypto Platforms NanoBit and CoinW6 of Scamming Investors

The U.S. Securities and Exchange Commission (SEC) has charged fake cryptocurrency platforms NanoBit and CoinW6 with defrauding investors and stealing their funds, marking the agency's first accusations against such schemes. The SEC filed two lawsuits on Tuesday, one in the U.S. District Court for the Eastern District of New York and another in the U.S. District Court for the Central District of California, against five entities and three individuals. Both lawsuits claim investors were "lured" on social media, including WhatsApp, LinkedIn, and Instagram, as part of a "relationship investment scam."

“Relationship investment scams, including those involving investments in crypto assets, pose a risk of catastrophic harm to retail investors, and the threat is rapidly growing as these schemes become increasingly popular among fraudsters,” said Gurbir S. Grewal, Director of the SEC’s Enforcement Division, in a statement on Tuesday.

From October 2023 to June 2024, scammers posing as "financial industry professionals" within WhatsApp groups convinced clients to invest through a fake crypto platform called NanoBit. To convince investors of the platform's legitimacy, NanoBit falsely claimed that its affiliate, Nanobit US Securities, was an SEC-registered broker-dealer. These so-called financial professionals then heavily promoted fake ICOs, promising investors significant returns. These funds were not used for investment but were instead diverted to "scheme participants," who then transferred over $2 million to Hong Kong through bank accounts.

Regarding CoinW6, the SEC claims individuals participating in the scheme pretended to be wealthy young professionals, connecting with victimized investors through LinkedIn and Instagram while also "pursuing romantic relationships over WhatsApp." These alleged scammers promised investors daily returns of up to 3% from CoinW6's stocks, mining, and other products. "In reality, investors’ funds were misappropriated, and their purported investments, profits, and account balances were fabricated," the SEC stated.