Judge Orders Six Defendants to Pay $5.5 Million but Leaves Seventh Defendant Out of Ruling

A federal judge in the U.S. District Court for the Eastern District of New York entered a default judgment on June 16 ordering NanoBit Limited and five related defendants to pay $5,518,902 in combined disgorgement, prejudgment interest, and civil penalties.

The SEC alleged the defendants ran the scheme from September 2023 to June 2024 by posing as financial professionals in WhatsApp groups and directing at least 18 investors to deposit funds into the NanoBit platform.

The platform displayed what appeared to be profitable trades, but no crypto transactions were executed, and investor funds were sent to bank accounts in Hong Kong instead. Participants wired more than $2 million offshore and misappropriated hundreds of thousands of dollars in investors' crypto assets, the SEC said. At least 18 investors lost nearly $1 million in crypto and fiat currency.

NanoBit also falsely claimed that an affiliate, NanobitUS Securities, was SEC-registered and tied to reputable financial firms. , Jiajie Liu, and Hua Zhao—did not appear in court. The judge found the default willful and that no meritorious defense was presented.

NanoBit Limited owes more than $532,000 in disgorgement, nearly $82,000 in prejudgment interest, and a $1.1 million civil penalty. Each of the three other entity defendants owes $1.1 million in penalties. Jiajie Liu owes $120,000 and Hua Zhao owes $55,000.

All defendants must pay within 30 days. The court permanently barred the six defendants from violating federal anti-fraud provisions and from participating in securities offerings or transactions. Jiajie Liu and Hua Zhao may still trade in their personal accounts.