A federal court in New York has imposed penalties totaling more than $5 million on four companies and two individuals linked to NanoBit, following allegations that they deceived investors through fake relationships established via WhatsApp. The US Securities and Exchange Commission (SEC) revealed that the judgement was handed down on June 16, with details about the legal proceedings published on June 29.
How the fraudulent scheme operated
In its lawsuit filed in September 2024, the SEC described this case as its first enforcement action targeting “relationship-based investment fraud” in the crypto sector. According to the agency, between September 2023 and June 2024, the perpetrators posed as professionals from the financial sector in WhatsApp group chats, gaining trust before directing potential investors to NanoBit.
The SEC stated that the defendants falsely presented NanoBit’s affiliate, NanobitUS Securities, as a registered broker-dealer. The platform promoted so-called initial coin offerings with misleading claims of high returns. However, the SEC emphasized that no actual trading took place on NanoBit, with over $2 million transferred abroad and other crypto assets funneled directly from investors to bank accounts in Hong Kong.
The SEC explained that there was no real trading activity on the NanoBit platform and that investors’ funds were diverted into overseas accounts.
Court-imposed penalties and restrictions
According to court records, NanoBit Limited was ordered to pay $532,649 in disgorgement, $81,957 in interest, and a $1,182,251 civil penalty. The three other defendants—Zhao Deli, Sweet Karma, and Radiant Horizons—were each fined $1,182,251.
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AAPLLower yet significant penalties were levied on two individuals. Jiajie Liu was ordered to pay a $50,000 fine, $9,485 in interest, and return $60,603. Hua Zhao was fined $50,000, ordered to return $4,500, and pay $704 in interest.
| Defendant | Penalty | Disgorgement | Interest |
|---|---|---|---|
| NanoBit Limited | $1,182,251 | $532,649 | $81,957 |
| Zhao Deli | $1,182,251 | Not specified | Not specified |
| Sweet Karma | $1,182,251 | Not specified | Not specified |
| Radiant Horizons | $1,182,251 | Not specified | Not specified |
| Jiajie Liu | $50,000 | $60,603 | $9,485 |
| Hua Zhao | $50,000 | $4,500 | $704 |
The court also issued permanent injunctions, prohibiting the defendants from committing further violations of anti-fraud provisions under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934.
Increased scrutiny of social media-driven investment traps
During this period, the SEC also brought a separate action against CoinW6, alleging it used Instagram and LinkedIn to draw investors into another fraudulent platform. While the tactics varied little, the pattern remained the same: establishing trust through personal connections before diverting funds to nonexistent trading accounts.
At the time, Gurbir S. Grewal, who led the SEC’s Enforcement Division, stressed that relationship-based investment frauds, especially those involving crypto assets, are an escalating risk for retail investors and that fraudsters are turning social media into tools for manipulating trust.
The SEC’s Office of Investor Education advises against relying on information from social media group chats when making investment decisions. It recommends that investors verify the registration and authority of individuals or firms on Investor.gov.
The case was handled by Todd Brody and Jeremy Brandt from the SEC’s New York Regional Office, with support from the agency’s Cyber and Emerging Technologies Unit throughout the process.
