A federal judge in New York has delivered a decisive win for the U.S. Securities and Exchange Commission (SEC), entering a $5.5 million default judgment against NanoBit Limited and five associated defendants for orchestrating a sophisticated “pig-butchering” cryptocurrency scam. The ruling, announced on June 30, 2026, marks one of the SEC’s first major enforcement actions targeting relationship-investment frauds built on fake crypto trading platforms.
The Anatomy of a Modern Crypto Scam
According to the SEC’s complaint, the scheme operated from September 2023 through June 2024. Perpetrators posed as financial industry professionals in WhatsApp groups, gradually building trust with victims before directing them to deposit funds into the NanoBit platform. Investors saw what appeared to be profitable trades on their dashboards, but the SEC alleged the platform never executed a single actual cryptocurrency transaction.
At least 18 investors lost nearly $1 million in combined cryptocurrency and fiat currency. Instead of trading, the defendants diverted funds to bank accounts in Hong Kong, wiring more than $2 million offshore and misappropriating hundreds of thousands of dollars in investors’ crypto assets. NanoBit also falsely claimed its affiliate, NanobitUS Securities, was SEC-registered and affiliated with reputable financial firms.
Breakdown of the Judgment
The U.S. District Court for the Eastern District of New York ordered $5,518,902 in combined disgorgement, prejudgment interest, and civil penalties on June 16. The defendants—NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, and Hua Zhao—never appeared in court. The judge found the default willful and no meritorious defense presented.
- NanoBit Limited: Over $532,000 in disgorgement, nearly $82,000 in prejudgment interest, and a $1.1 million civil penalty.
- Three other entity defendants: Each owes $1.1 million in penalties.
- Jiajie Liu: Owes $120,000.
- Hua Zhao: Owes $55,000.
All six defendants are permanently barred from violating federal anti-fraud provisions and from participating in securities offerings or transactions, though Liu and Zhao may still trade in their personal accounts. All payments are due within 30 days.
Broader Enforcement Context
The SEC filed the original complaint in September 2024 alongside a parallel action targeting another fake platform, CoinW6. Both cases were framed as among the agency’s first enforcement actions against relationship-investment scams involving fake crypto platforms. A seventh defendant named in the original complaint, Fei Liao, was not included in this default judgment.
“Pig-butchering” scams—where fraudsters build long-term relationships with victims before stealing their assets—have surged alongside crypto adoption. The FBI’s Internet Crime Complaint Center (IC3) reported over $3.5 billion in losses from such scams in 2023 alone. This judgment signals the SEC’s increasing willingness to pursue not just the platforms but the network of entities and individuals enabling these frauds.
Investor Protection Takeaways
Investors should verify any platform’s registration status through the SEC’s Investment Adviser Public Disclosure (IAPD) database and FINRA’s BrokerCheck. Be wary of unsolicited investment advice via messaging apps, guarantees of high returns with low risk, and pressure to move funds quickly. Legitimate firms rarely operate exclusively through WhatsApp or Telegram groups.
FAQ
What is a “pig-butchering” crypto scam?
A pig-butchering scam is a type of fraud where perpetrators build trust with victims over time—often through social media or messaging apps—before convincing them to invest in a fake platform. The “butchering” refers to the final stage where the scammer steals all deposited funds and disappears.
How can I verify if a crypto platform is legitimate?
Check the SEC’s IAPD database and FINRA’s BrokerCheck for registration status. Look for a physical address, clear regulatory disclosures, and a track record. Be skeptical of platforms that only operate through messaging apps and lack transparent corporate information.
What does a default judgment mean for the defendants?
A default judgment occurs when defendants fail to respond or appear in court. The court accepts the plaintiff’s allegations as true and orders relief. Here, it means the defendants are legally liable for the $5.5 million and permanently barred from securities activities, though they can still challenge the judgment in limited circumstances.
