- The feds allege two crypto firms stole $2 million.
- The firms allegedly used WhatsApp and other popular platforms to lure victims.
- Investment scams hit $4 billion in 2023.
The US Securities and Exchange Commission accused the crypto investment platforms NanoBit and CoinW6 of soliciting investors on social media apps and stealing over $2 million.
In the civil actions filed Tuesday, the SEC said the companies ripped off investors by developing relationships with them over WhatsApp, LinkedIn, and Instagram.
“The threat is increasing rapidly as these scams become more popular with fraudsters,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in statement.
The Federal Bureau of Investigation says investment scams are the most popular criminal schemes involving crypto. Annual losses to victims rose 53% to almost $4 billion between 2022 and 2023, according to the FBI.
NanoBit
The SEC alleged NanoBit and three other entities and three individuals violated the antifraud provisions of federal securities laws. The case was filed in the US District Court for the Eastern District of New York.
The alleged scam ran between October 2023 to June 2024, according to the SEC. The accused impersonated financial professionals in WhatsApp groups to build investors’ trust and then solicited their investments through the NanoBit crypto asset trading platform, the regulator said.
It also alleged that NanoBit’s affiliate, NanobitUS Securities, was an SEC-registered broker. The supposed financial professionals then touted fake initial coin offerings as a way for the investors to make returns.
The SEC said the participants wired more than $2 million to bank accounts in Hong Kong.
NanoBit did not immediately respond to a request for comment.
CoinW6
In a separate complaint, the SEC alleged CoinW6 ran a scam between July 2022 and December 2023.
The alleged fraud took the form of a traditional pig butchering scam. The name derives from the idea that fraudsters fatten up the takings before they gut the victim’s accounts.
“I expect pig-butchering scams to continue to increase in both severity and scope,” Eric Jardine, the cybercrimes research lead at Chainalysis, told DL News in January.
In the alleged CoinW6 scheme, people posing as young, wealthy professionals contacted prospective investors via LinkedIn and Instagram and pursued romantic relationships over WhatsApp, according to the SEC.
The participants gained investors’ trust and then convinced them to open accounts on CoinW6′s supposed trading platforms.
The investors were told they could earn up to a daily 3% return from CoinW6′s crypto asset staking, mining, and yield-farming products, the regulator said.
If investors tried to withdraw their profits, the schemers demanded additional payments, claimed the assets were frozen, or tried to blackmail them using compromising romantic communications, the SEC said.
CoinW6 could not be reached for comment.
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
