The US Securities and Exchange Commission (SEC) has taken its first action against crypto “pig butchering” scams. The SEC charged two supposedly fake crypto exchanges, NanoBit and CoinW6, with fraud.
Three individuals and five entities connected to the accused exchanges allegedly scammed investors of nearly $3.2 million by building fake relationships online.
SEC Targets Fake Crypto Exchanges in Landmark Action
In a significant move, the SEC filed charges against two allegedly fake crypto exchanges, NanoBit and CoinW6. The regulator claims these platforms carried out elaborate scams, stealing millions from investors.
Today we charged multiple entities and individuals in connection with two relationship investment scams involving fake crypto asset trading platforms NanoBit and CoinW6, respectively. https://t.co/TSNv0X8aN8 pic.twitter.com/cSPhTQt3Aj
— U.S. Securities and Exchange Commission (@SECGov) September 17, 2024
According to the SEC, the exchanges posed as legitimate crypto platforms and lured investors with false promises of high returns.
The SEC’s action is a first in its fight against “pig butchering” scams, which typically involve fraudsters forming fake relationships with victims to trick them into investing.
According to the SEC, the scammers targeted individuals on social media platforms like LinkedIn and Instagram, eventually moving conversations to WhatsApp.
In its recent statement, the SEC alleges that NanoBit and CoinW6 created fake crypto ecosystems to deceive investors. They falsely claimed to offer services like staking, mining, and yield farming with high daily returns.
One of the accused platforms, CoinW6, convinced investors they could earn up to 3% in daily returns, but none of these services were real.
The scammers used the personal relationships they built with investors to gain their trust, ripping them off their money.
The SEC stated that some victims were romantically manipulated, with scammers pretending to be attractive professionals. These fake relationships were crucial to the fraud, making victims believe they were investing with trustworthy individuals.
One victim was reportedly blackmailed when they tried to withdraw their funds. The scammers threatened to leak their private messages unless additional payments were made. This level of manipulation highlights the personal nature of the fraud.
Scammers Stole Millions from Victims
According to the SEC’s charges, the victims collectively lost around $3.2 million. CoinW6 alone allegedly defrauded at least 11 investors of over $2.2 million.
Similarly, the regulator accused NanoBit and its associates of scamming 18 investors out of nearly $968,000. It claimed NanoBit even lied about being registered with the SEC to build trust with investors.
In addition, the US securities regulator said NanoBit promoted completely fake initial coin offerings (ICO). The SEC also claimed the entire NanoBit platform was fake.
According to the filing, NanoBit sent investors’ money to bank accounts in Hong Kong instead of channeling them to real investments. When victims attempted to withdraw their money, the scammers demanded more payments, such as fake taxes and fees.
One investor was told they couldn’t withdraw funds until they paid a supposed “Ghana miners fee” of nearly $11,000.
The SEC’s charges are part of broader efforts in addressing these types of crypto-related frauds. The SEC wants to permanently stop both companies from operating, fine them, and make them return the stolen money.
However, the case serves as a reminder for the public to be cautious about investments promoted through personal connections or unfamiliar platforms.
Our Editorial Process
Our Editorial Process
Share
Print
