SEC Targets Pig-Butchering Scam, Sues NanoBit, CoinW6 for $2 Million Scam

Key Takeaways

• As per SEC, NanoBit and CoinW6 lured investors via social media, posing as professionals to lure victims into fraudulent investment schemes.
• The SEC’s lawsuit against NanoBit names three individuals, accusing them of defrauding at least 18 investors out of nearly $1 million.
• The SEC alleges that CoinW6 between July 2022 and December 2023,  defrauded 11 investors of $2.2 million

The U.S. Securities and Exchange Commission (SEC) has filed lawsuits against two crypto platforms, NanoBit and CoinW6, accusing them of defrauding investors out of more than $2 million. The cases, filed on September 19, mark the SEC’s first enforcement actions against “pig butchering” scams, where fraudsters build trust with victims before stealing their money.

According to the SEC, both NanoBit and CoinW6 lured investors via social media platforms like WhatsApp, LinkedIn, and Instagram, posing as professionals to lure victims into fraudulent investment schemes. As soon as investors gave their funds, the platforms displayed fake profits, but blocked withdrawals, leaving investors empty-handed.

“These relationship investment scams, especially those involving crypto assets, pose a significant risk of catastrophic harm to retail investors,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “The threat is increasing rapidly as these scams become more popular with fraudsters.”

The SEC’s lawsuit against NanoBit names three individuals—Jiajie Liu, Fei Liao, and Hua Zhao—accusing them of defrauding at least 18 investors out of nearly $1 million.

The group allegedly impersonated financial professionals in WhatsApp groups from October 2023 to June 2024, encouraging victims to invest in NanoBit, which was falsely presented as being connected to a regulated platform. The scam included a fake initial coin offering (ICO), with the defendants allegedly transferring funds to Hong Kong-based bank accounts.

In its second lawsuit, SEC alleges that CoinW6 between July 2022 and December 2023,  defrauded 11 investors of $2.2 million. As per SEC, the scammers posed as “young, wealthy professionals” on social media, developing romantic relationships with their victims before introducing them to CoinW6. They promised returns of up to 3% per day through crypto staking and yield farming.

Victims were pressured into investing more money, often being told to withdraw funds from retirement accounts or borrow from friends and family. When investors attempted to withdraw, the fraudsters demanded additional payments, claiming the assets were frozen due to law enforcement inquiries.SEC states that in certain cases, victims were blackmailed with compromising romantic chats.

“These cases are a reminder to be cautious of investment opportunities promoted by strangers on social media,” Grewal added. “In these two instances, fraudsters created fake crypto ecosystems that misled investors with false information.”