The U.S. Securities and Exchange Commission (SEC) has filed its first case against scammers involved in a crypto scheme known as “pig butchering.” The SEC accused two fraudulent crypto trading platforms, NanoBit and CoinW6, of stealing around $3.2 million.
In a lawsuit against five companies and three individuals, the SEC claims these platforms built trust with investors through social media, only to exploit those relationships and take their money. However, the charges were announced in a statement on Sept. 17.
The SEC filed a lawsuit against CoinW6 on Sept. 17 in a California federal court, accusing the company of orchestrating a scheme involving a network of individuals posing as “young, attractive professionals.” Specifically, these scammers allegedly defrauded 11 investors, stealing over $2.2 million.
According to the SEC, the fraudsters approached their victims on LinkedIn and Instagram, gradually building connections that led to romantic pursuits over WhatsApp between July. 2022 and Dec. 2023.
SEC sues Nanobit for investment scams
The regulator claimed that scammers persuaded investors to create CoinW6 accounts by promising daily returns of up to 3% through its staking, mining, and yield farming products. However, the SEC said these were completely fake.
When investors tried to withdraw their funds, they were allegedly hit with demands for extra payments under the guise of taxes and fees or were even blackmailed with threats to expose their private romantic WhatsApp messages to family or friends.
However, the SEC alleged that one investor refused to send more money for a supposed security deposit, which led the scammers to blackmail them with threats of exposing their private messages to their families. At the same time, on Sept. 17, the SEC sued NanoBit and six other individuals in New York federal court.
Authorities accused them of scamming at least 18 people out of nearly $968,000 by pretending to be financial professionals in WhatsApp groups. Between Oct. 2023 and June this year, the regulator accused Nanobit and others of misleading investors by promoting their platform, claiming they registered NanobitUS Securities with the SEC to gain trust.
Furthermore, the SEC alleged that they pushed completely fake initial coin offerings and that the Nanobit platform was fraudulent, funneling investor money into bank accounts in Hong Kong.
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