SEC v. NanoBit: WhatsApp Pig-Butchering Scam Impersonating Finance Professionals

What Happened

Between approximately September/October 2023 and June 2024, scheme participants used at least seven WhatsApp groups to impersonate financial-industry professionals and cultivate trust with U.S. retail investors before steering them into "NanoBit," a purported cryptocurrency trading platform that in reality executed no real trades and falsely claimed an SEC-registered brokerage affiliate ("NanobitUS Securities"). The SEC's complaint alleges at least 18 investors lost a combined ~$967,835 in crypto and fiat, with more than $2 million ultimately wired by the scheme's shell-company conduits to bank accounts in Hong Kong. The case, SEC v. NanoBit Limited et al. (E.D.N.Y., No. 2:24-cv-06517), was among the SEC's first enforcement actions explicitly targeting this "relationship investment"/pig-butchering fraud model, and culminated in a June 16, 2026 default judgment of $5,518,902 against six of the seven defendants.

How the Attack Worked

Scheme participants added or drew targets into at least seven WhatsApp groups (examples named in the complaint: "VIP8012," "VIP34") where they posed as financial-industry professionals, including personas the complaint calls "Pseudo-Director A" and "Pseudo-Director B," each impersonating a real senior investment professional, and supported by fake assistants and other planted group members who reinforced the illusion of a thriving trading community. Over time this built rapport and credibility (the classic "fattening" phase of pig butchering) before participants steered members toward a purported crypto trading platform, NanoBit (previously hosted at NanoBitUS.com). To allay safety concerns, NanoBit falsely claimed its affiliate "NanobitUS Securities" was an SEC-registered broker-dealer, and the in-group "professionals" touted fake initial coin offerings, including "Cosmic Energy" and "VTrade," complete with counterfeit downloadable whitepapers, promising outsized returns. In reality no trades were ever executed on the platform: the trading interface was fabricated. When victims tried to withdraw funds, they were stalled with undisclosed "miner's fees" (one investor was told he owed $10,692 in "Ghana miners fees" before his withdrawal could be processed), told other members had successfully cashed out only after paying such fees, or simply removed from the WhatsApp group when they pushed back (the complaint cites one investor removed from "VIP8012" on March 11, 2024 after calling the scheme a fraud). Investor money was funneled through entity defendants: Radiant Horizons Limited allegedly wired over $2 million to Hong Kong bank accounts (e.g., $145,690 on Jan. 17, 2024 and $127,638 on Jan. 18, 2024), while crypto contributions went to unhosted wallet addresses, and Sweet Karma Fashion Inc. and Zhao Tropical Deli Inc. (unrelated-sounding small-business entities) served as fiat "mule" conduits.

The Lure & the Tell

The lure: strangers added victims to (or drew them into) WhatsApp "VIP" investment groups populated by seemingly successful traders and a warm, patient "senior director" figure who built a personal rapport before ever mentioning money, then vouched for a slick-looking crypto trading platform and a supposedly SEC-registered brokerage affiliate. The tell: legitimate SEC-registered brokers and investment professionals do not recruit clients through unsolicited WhatsApp group additions, group chats are not a substitute for verifying registration on Investor.gov/EDGAR, and any platform that invents new "fees" (like undisclosed miner's fees) specifically at the moment of withdrawal, or that removes a member from the group for asking hard questions, is exhibiting the textbook signature of pig-butchering fraud rather than a functioning trading venue.

Outcome

The SEC filed its civil enforcement complaint on September 17, 2024 in EDNY (SEC v. NanoBit Limited et al., No. 2:24-cv-06517), charging four entities (NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc.) and three individuals (Jiajie Liu, Fei Liao, Hua Zhao) with violating the antifraud provisions of the Securities Act and Exchange Act (Section 17(a), Section 10(b)/Rule 10b-5). On June 16, 2026, the EDNY court entered a final default judgment against six of the seven defendants (all except Fei Liao, who was named in the original complaint but was not part of the default judgment), permanently enjoining them from further securities-law violations and ordering a combined $5,518,902 in disgorgement, prejudgment interest, and civil penalties. Liu and Zhao were further restricted to trading only in their own personal accounts. The SEC announced the judgment via Litigation Release No. 26576 on June 29, 2026.

Why It Matters

This is one of the SEC's first enforcement actions explicitly built around the "pig-butchering" / relationship-investment fraud model, showing that U.S. securities regulators now treat WhatsApp-group crypto scams as a distinct, prosecutable pattern rather than ordinary fraud. It illustrates how the technique blends classic long-con social engineering (patient trust-building via impersonated authority figures and a fabricated peer community) with securities-fraud tactics (a fake registered-broker claim, fake ICOs) to bypass the skepticism investors typically reserve for cold outreach. It also highlights the enforcement gap in this crime type: even a full $5.5 million default judgment is a paper win when the underlying funds have already been wired to Hong Kong and the responsible individuals may be judgment-proof or unreachable, meaning victim restitution is far from guaranteed. Finally, it validates that seemingly "boring" WhatsApp group chats revolving around finance/investing content are an active, regulator-recognized attack surface for retail investors.

Defenses

SEC's own investor alert (issued with this case, in collaboration with CFTC, FINRA, and NASAA) advises: never rely solely on information from group chats to make investment decisions; independently verify any broker-dealer's registration status via Investor.gov/SEC EDGAR rather than trusting an in-group claim of being "SEC-registered"; be suspicious of unsolicited additions to investment-themed WhatsApp/Telegram groups by strangers; treat any request for extra fees (e.g., "miner's fees") to unlock a withdrawal as a hard stop, not a hurdle to pay; and note that being removed from a group chat after questioning returns or fees is itself a fraud indicator. Financial institutions and messaging platforms are encouraged to flag patterns of newly-added contacts steering users toward off-platform "trading" links.