The SEC initiated its first enforcement actions against crypto scams on September 17 by suing two fake trading platforms, NanoBit and CoinW6. The scammers are said to have stolen $3.2 million by faking relationships on social media platforms. As per the report, the crackdown prevents increasing fraud cases where criminals deceive investors with promises and threats.
Pig Butchering’ Scam
The SEC filed lawsuits against five entities and three individuals associated with these platforms. The entities are accused of creating fake exchanges to defraud investors of millions of dollars. The SEC noted that this is the first time it is cracking down on ‘pig butchering’ scams.
The SEC’s Division of Enforcement director Gurbir Grewal called the scam a “fake crypto ecosystem.” He urged investors to avoid being swindled by strangers on the internet. The SEC noted the growing risk of such schemes, which deceive their targets and obtain their trust.
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
CoinW6 Targeted Victims
The SEC filed a lawsuit against CoinW6 in the California federal court, accusing the company of working with a group of people who impersonated “young, attractive professionals”. The scammers targeted at least 11 investors and stole more than $2.2 million. They communicated with the victims on LinkedIn and Instagram and then moved the conversation to WhatsApp to build fake relationships.
Fake Tim Cook Stream Scams Millions Before iPhone LaunchBetween July 2022 and December 2023, the scammers persuaded their victims to open CoinW6 accounts. They claimed to offer up to 3% daily profits from staking, mining, and yield farming services.
Blackmail For Money
When investors tried to withdraw their money, they were charged more. Some of the scammers would even go further to demand for more money by telling the victims that they will reveal the messages sent to family and friends.
At the same time, the SEC filed a lawsuit against NanoBit and six others in a New York federal court. NanoBit is said to have defrauded at least 18 people of almost $968,000. The scammers used WhatsApp groups to pretend to be financial professionals and stated that NanoBit was associated with an SEC-registered broker to lure investors. Both CoinW6 and NanoBit are now charged with violating securities law antifraud provisions. CoinW6 was also accused of selling unregistered securities. The SEC is asking for permanent injunctions, civil penalties, and the stolen funds with interest. This crackdown is a reminder to investors of the growing dangers of falling prey to crypto-related fraud.
