A sweeping investment scam orchestrated by a network of individuals and entities has come under the scrutiny of the Securities and Exchange Commission (SEC). The SEC filed a complaint in the United States District Court for the Eastern District of New York on September 17, 2024, against several defendants, including NanoBit Limited. The allegations paint a picture of deceit and manipulation that defrauded U.S.-based investors out of nearly $1 million.
The SEC's complaint details how NanoBit Limited, along with Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, Fei Liao, and Hua Zhao (collectively referred to as "Defendants"), executed a complex scheme to defraud investors from September 2023 to June 2024. According to the SEC, these entities and individuals created an elaborate façade involving fake financial professionals who gained trust through WhatsApp groups before persuading victims to invest in a bogus crypto asset trading platform called NanoBit.
The scheme began with participants posing as seasoned financial advisors in various WhatsApp groups dedicated to investment advice. These impersonators built rapport with potential investors by offering seemingly sound financial guidance. Once trust was established, they encouraged victims to invest their money into the NanoBit Platform—a sham trading interface that mimicked legitimate crypto asset trading platforms but conducted no real transactions. When investors attempted to withdraw their funds or profits, they found themselves unable to do so as the fraudsters vanished.
NanoBit falsely claimed affiliations with reputable financial entities such as NASDAQ and Apex Clearing Corp., further lending credibility to their ruse. Investors were misled into believing that their funds were being traded profitably on this platform when, in reality, their money was being siphoned off into untraceable crypto addresses controlled by the scheme’s perpetrators.
The SEC's complaint also highlights how Liu, Liao, and Zhao used their respective companies—Radiant Horizons Limited, Sweet Karma Fashion Inc., and Zhao Tropical Deli Inc.—to receive and misappropriate fiat currency from investors. These "Money Mule Defendants" facilitated the laundering of investor funds through various bank accounts before transferring substantial amounts overseas or using them for personal expenses.
Among the most egregious aspects of this scam were fake Initial Coin Offerings (ICOs) promoted within these WhatsApp groups. Investors were lured into purchasing fictitious tokens like Cosmic Energy (EGYG) and VTrade (VTRD), which promised astronomical returns but had no real value or backing projects.
In its filing, the SEC seeks multiple forms of relief from the court: permanent injunctions against all defendants to prevent future violations of federal securities laws; disgorgement of all ill-gotten gains plus prejudgment interest; civil monetary penalties; and any other relief deemed just by the court.
Representing the plaintiff is Antonia M. Apps along with Sheldon L. Pollock, Rebecca Reilly, Alexander Vasilescu, Todd Brody, Jeremy Brandt (pending admission pro hac vice), and Michael DiBattista from the SEC's New York Regional Office. Case ID 24 Civ. 6517.