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.”

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’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.

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.

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