SEC wins judgment in NanoBit crypto fraud case

This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are highly volatile. Always do your own research before making any investment decisions.

The Securities and Exchange Commission (SEC) secured a final judgment against NanoBit and affiliated defendants for a multimillion-dollar crypto fraud scheme. The U.S. District Court for the Eastern District of New York entered final judgments against four corporate entities and two individuals on June 16, concluding a case accusing the defendants of defrauding at least 18 investors between 2023 and 2024.

Judgments and financial penalties imposed

The court ordered the NanoBit entity to pay nearly $1.8 million, including disgorgement of ill-gotten gains and prejudgment interest totaling about $81,200. A civil penalty of $1.18 million is included in this judgment, according to Tradingview’s report. Meanwhile, associated entities such as Radiant Horizons Limited, Sweet Karma Fashion Inc., and Zhao Tropical Deli Inc. were each fined $1.18 million. Individuals connected to the scheme—Jiajie Liu and Hua Zhao—also faced penalties. Liu was held liable for a portion of the total judgment.

Those judgments and penalties total over $5 million, representing a broad regulatory crackdown. The court imposed permanent injunctions barring these defendants from participating in issuing, purchasing, or selling securities, which effectively blocks future securities-related activities involving them in the U.S.

Legal basis and enforcement significance

According to Law360’s coverage, the SEC’s case against NanoBit marked one of its early enforcement efforts focused on relationship-based crypto investment frauds.

Investor impact and wider fraud trends

Victims of the NanoBit scheme lost significant sums, with their funds routed to Hong Kong accounts while stolen crypto assets worsened their losses. The NanoBit case coincided with rising U.S. congressional interest in cracking down on crypto scams. For example, the Stop Crypto ATM Scams Act introduced in the Senate aims to counteract fraud involving digital assets and unregulated platforms.

SEC’s broader crypto enforcement strategy

Law360 reports the SEC is actively carrying out multidimensional enforcement campaigns targeting crypto fraud across various vectors—including relationship scams and fake investment platforms. The judgment against NanoBit and its affiliates illustrates the agency’s power to impose hefty monetary penalties paired with injunctions aimed at preventing repeat offenses. This case ties in with recent major fraud prosecutions like the $1.8 billion HyperFund scheme, confirming the SEC’s strong commitment to cleaning up the crypto ecosystem.

Next steps and future implications

The June 16 default judgment in the Eastern District of New York leaves penalties to be collected and permanent injunctions enforced, affirming strong judicial support for regulatory efforts against crypto fraud. Observers—including Cryptobreaking—view this as a precedent for litigating relationship-based crypto scams, stressing the importance of vigilance among investors and intermediaries alike, according to Law360’s coverage.

As the crypto markets evolve, the NanoBit enforcement signals that regulators will watch emerging fraud schemes closely and collaborate internationally to trace illicit fund flows, especially those headed to offshore accounts. This judgment complements recent developments like the $1.8 billion HyperFund prosecution, illustrating growing U.S. efforts to clamp down on complex crypto fraud, according to Cryptobreaking.

The judgment was entered by the US District Court for the Eastern District of New York on June 16.

The case involves six defendants, including two main individuals tied to the scheme, one of whom is Jiajie Liu.