SEC Investigates Individuals Tied to Nanobit and CoinW6 Scams

The U.S. Securities and Exchange Commission (SEC) has initiated charges against several individuals and entities tied to two fraudulent cryptocurrency platforms, Nanobit and CoinW6.

The SEC alleges that the participants in these schemes used social media apps such as WhatsApp, LinkedIn, and Instagram to deceive investors by creating fake relationships. The agency noted that these cases represent its first enforcement action against this scam.

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, stated on Tuesday, “Relationship investment scams, including those involving crypto-asset investments, pose a risk of catastrophic harm to retail investors, and the threat is increasing rapidly as these scams become more popular with fraudsters.”

The SEC’s complaint against Nanobit alleges that, between October 2023 and June 2024, participants in the scheme posed as financial professionals on WhatsApp to lure investors. According to the complaint, Nanobit claimed ties to a SEC-registered broker to promote fake initial coin offerings, convincing investors to transfer over $2 million. The funds were subsequently moved to accounts in Hong Kong, where the scammers misappropriated the assets.

The regulator seeks civil penalties and permanent injunctions against those involved. Grewal emphasized that investors should be cautious of schemes promoted by strangers through social media, especially when dealing with unsolicited crypto investment opportunities.

CoinW6, another fraudulent scheme cited by the regulator, reportedly operated from July 2022 to December 2023. Participants in this scam built relationships with victims through social media, often posing as wealthy professionals on LinkedIn and Instagram before transitioning to WhatsApp. The fraudsters convinced their targets to invest in the fake CoinW6 platform, promising daily returns of up to 3%.

However, when investors attempted to withdraw funds, the scammers demanded additional payments for taxes and fees, falsely claiming that the assets were frozen by law enforcement or using compromising romantic communications to blackmail the victims.

The regulator’s actions against both Nanobit and CoinW6 highlight the increasing risks investors face in the crypto space. Grewal used this opportunity to stress the need for individuals to protect themselves from such scams. “These charges are a reminder to the public to be on heightened alert about potential scams involving investment opportunities promoted by strangers on social media,” he said.

The SEC has filed complaints for both cases and is pursuing civil penalties and injunctions to prevent further fraudulent activity associated with these schemes.

Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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