The SEC has filed charges against five entities and three individuals in two relationship-based investment scams involving fraudulent crypto trading platforms, NanoBit and CoinW6. These scams were executed through social media platforms like WhatsApp, Instagram, and LinkedIn, where the fraudsters gained investors’ trust by pretending to be financial professionals or engaging in romantic relationships.
In the NanoBit scam, which ran from October 2023 to June 2024, the scammers posed as financial experts in WhatsApp groups to lure investors into a fake cryptocurrency platform. The platform falsely claimed to be associated with an SEC-registered broker, NanobitUS Securities. The scam tricked investors into funding fake initial coin offerings (ICOs), resulting in over $2 million being wired to Hong Kong accounts and hundreds of thousands of dollars in cryptocurrency being misappropriated.
The CoinW6 scam, which operated between July 2022 and December 2023, involved individuals pretending to be wealthy professionals who contacted potential victims through social media and developed trust over time. They convinced investors to deposit funds into CoinW6’s crypto asset platform, promising returns of up to 3% per day through activities such as staking and mining. However, the platform was entirely fictitious, and when victims attempted to withdraw their funds, the scammers either demanded extra fees or blackmailed them using romantic exchanges.
The SEC is seeking permanent injunctions, financial penalties, and disgorgement against all the parties involved. The complaints were filed in U.S. District Courts in New York and California. Additionally, the SEC’s Investor Education Office, in collaboration with other financial regulators, has issued an alert to warn investors about the growing risks of these types of scams. Fraudsters often approach victims online, building trust before defrauding them through fake investment schemes.
For more information, visit the SEC’s official release.
