SEC finalizes $5M judgment against NanoBit

The Securities and Exchange Commission finalized a judgment on Monday ordering defendants in the NanoBit case to pay in excess of $5 million, concluding an enforcement action the agency filed in September 2024.

The agency's complaint alleges that between September 2023 and June 2024 NanoBit and others posed as financial professionals in WhatsApp groups to gain investors' trust. Group members encouraged people to invest in NanoBit and falsely claimed an affiliate was an SEC-registered broker.

The complaint says promoters pushed fake initial coin offerings as a way for investors to earn large returns. “The supposed financial professionals allegedly then promoted fake initial coin offerings as a way for the investors to make substantial returns,” the SEC wrote.

According to the filing, no transactions took place on the NanoBit platform. Investor funds were diverted to participants in the scheme, with more than $2 million wired to bank accounts in Hong Kong and hundreds of thousands of dollars' worth of cryptocurrency misappropriated.

The final judgment orders payment of more than $5 million. The agency's statement did not specify whether that total includes disgorgement, civil penalties or other relief.

The SEC described the case as its first enforcement action involving what it called relationship investment scams, in which perpetrators pose as trusted advisers or peers on messaging platforms to solicit investments.

The judgment closes the enforcement case brought last year. The agency reiterated an investor alert advising caution toward investment solicitations received through social apps and urged investors to verify broker registration and platform activity independently.