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SEC settles NanoBit fraud case with over $5 million penalties

SEC settles NanoBit fraud case with over $5 million penalties

A default judgment in the SEC’s September 2024 case found NanoBit and others used WhatsApp groups to pose as financial professionals, tout a fake token offering and divert investor funds.

Fact Check
The SEC's official litigation release (LR-26576) directly confirms a final judgment entered June 16, 2026 in the NanoBit case originally filed September 17, 2024. The itemized penalties (disgorgement, prejudgment interest, and civil penalties across six defendants) sum to approximately $5.5 million, exceeding the claimed 'over $5 million.' The original SEC press release (2024-134) confirms defendants used WhatsApp groups to pose as financial professionals, touted fake token/ICO offerings via the sham NanoBit platform, and diverted/wired over $2 million in investor funds to Hong Kong. Cointelegraph independently corroborates. The phrase 'settles' is slightly imprecise—it was a default judgment rather than a negotiated settlement—but the substantive facts are fully supported.
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Summary

A federal court in New York entered a default judgment ordering more than $5 million in fines, disgorgement and interest against NanoBit operators and related defendants in the SEC’s September 2024 fraud case. The regulator alleged NanoBit and others posed as financial professionals in WhatsApp groups from September 2023 to June 2024, promoted fraudulent initial coin offerings, falsely claimed an affiliate was an SEC-registered broker-dealer and diverted investor funds, including more than $2 million sent to Hong Kong bank accounts. The SEC said there was no real trading on NanoBit and described the case as its first enforcement action targeting cryptocurrency “relationship investment scams,” a category of social-media-driven fraud aimed at retail investors.

Terms & Concepts
  • initial coin offerings: Fundraising sales of digital tokens to investors, often marketed with promises of future value or platform use.
  • disgorgement: A court-ordered repayment of money obtained through allegedly unlawful conduct.
  • broker-dealer: A firm registered to buy and sell securities for customers or for its own account.