CDS Crypto News NanoBit and CoinW6: Inside the SEC’s First Lawsuit Against Crypto Romance Scams
Crypto News

NanoBit and CoinW6: Inside the SEC’s First Lawsuit Against Crypto Romance Scams

82
NanoBit and CoinW6: Inside the SEC’s First Lawsuit Against Crypto Romance Scams

How NanoBit and CoinW6 Tricked Investors: SEC Files Fraud Charges

NanoBit and CoinW6 – The U.S. Securities and Exchange Commission (SEC) has announced its first enforcement action against cryptocurrency “pig butchering” scams, charging two fake crypto trading platforms, NanoBit and CoinW6. The SEC accuses these platforms of stealing nearly $3.2 million from unsuspecting investors by gaining their trust through social media and luring them into fraudulent investment schemes.

SEC Files Charges Against NanoBit and CoinW6

On September 17, the SEC filed lawsuits in federal courts in California and New York against five entities and three individuals connected to NanoBit and CoinW6. These cases represent the SEC’s first action targeting this type of scam, where fraudsters create fake crypto ecosystems that appear legitimate to investors but ultimately lead to significant financial losses.

“In these two cases, we allege that fraudsters created fake crypto ecosystems that displayed false information to investors,” said Gurbir Grewal, Director of the SEC’s Division of Enforcement. “As these scams become more popular with fraudsters, the threat is increasing rapidly, and we urge investors to be cautious about any online investments promoted by strangers.”

NanoBit and CoinW6: Inside the SEC’s First Lawsuit Against Crypto Romance Scams

How the Scam Worked

The SEC claims that between July 2022 and December 2023, scammers posing as “young, attractive professionals” reached out to potential victims through LinkedIn and Instagram, eventually building romantic relationships over WhatsApp. Once trust was established, they convinced investors to open accounts on the CoinW6 platform, promising returns of up to 3% daily from products like staking, mining, and yield farming, all of which were fictitious.

When investors attempted to withdraw their funds, they were met with demands for additional payments, often for supposed “taxes and fees.” In some cases, scammers blackmailed victims, threatening to leak their private WhatsApp messages to friends and family if they didn’t comply with their demands.

One investor refused to pay an additional security deposit based on a fabricated law enforcement order and was subsequently blackmailed with the threat of leaking intimate messages.

NanoBit and CoinW6: Inside the SEC’s First Lawsuit Against Crypto Romance Scams

NanoBit’s Fraudulent Activities

Similarly, NanoBit and its affiliates were accused of defrauding at least 18 individuals out of nearly $968,000. According to the SEC, NanoBit falsely claimed to be partnered with “NanobitUS Securities,” an entity they falsely asserted was an SEC-registered broker. Investors were drawn into the platform through this fraudulent claim, along with promises of fake initial coin offerings (ICOs).

Once again, when investors tried to withdraw their funds, they were met with excuses and additional fees. One investor was reportedly told they couldn’t withdraw their money until they paid “Ghana miners fees” totaling $11,000. Instead of facilitating withdrawals, NanoBit wired investor funds to bank accounts in Hong Kong.

NanoBit and CoinW6: Inside the SEC’s First Lawsuit Against Crypto Romance Scams

SEC’s Legal Action and Remedies

Both CoinW6 and NanoBit were charged with violating antifraud provisions of U.S. securities laws. CoinW6 was also charged with offering and selling unregistered securities. The SEC is seeking permanent injunctions, financial penalties, and disgorgement of ill-gotten gains from both entities.

Conclusion

The SEC’s actions against NanoBit and CoinW6 mark a significant milestone in the fight against crypto fraud. These scams, which prey on unsuspecting investors by exploiting social media and romantic relationships, are becoming increasingly common. The SEC’s crackdown serves as a warning to investors to be cautious and vigilant when engaging with unknown parties promoting investments online.

FAQ

What is a “pig butchering” scam in cryptocurrency?

A “pig butchering” scam involves fraudsters building trust with investors, often through romantic or social relationships, before leading them into fake crypto investments to steal their funds.

How much money was allegedly stolen by NanoBit and CoinW6?

The SEC claims nearly $3.2 million was stolen, with NanoBit defrauding approximately $968,000 from 18 victims and CoinW6 defrauding over $2.2 million from 11 victims.

What legal action has the SEC taken?

The SEC has filed lawsuits against both platforms for violating securities laws, seeking injunctions, penalties, and the return of stolen funds.

NanoBit and CoinW6: Inside the SEC’s First Lawsuit Against Crypto Romance Scams

Leave a comment

Leave a Reply

Related Articles

Retail Investors Return to Crypto: Bitcoin Hits All-Time High as Trump Victory Fuels Cryptocurrency Momentum

Retail Investors Return to Crypto: Bitcoin Hits All-Time High as Trump Victory...

Ethereum Foundation Treasury Strategy: $788.7M in ETH Holdings as of October 2024

Ethereum Foundation Treasury Strategy: $788.7M in ETH Holdings as of October 2024

Trump’s 2024 Victory: What It Means for U.S. Crypto Regulations

Trump's 2024 victory is expected to bring pro-crypto reforms to the U.S.,...

Tether Financing Expands: $45 Million Crude Oil Deal Completed

Tether finances a $45M crude oil deal, expanding its role in global...