Deniz 
In what the U.S. Securities and Exchange Commission (SEC) claims to be first accusations claiming this kind of fraud, two purportedly fraudulent crypto platforms, NanoBit and CoinW6, were accused of misleading investors and taking their money.
Tuesday in the U.S. District Court for the Eastern District of New York and the U.S. District Court for the Central District of California, the agency filed two cases against five organizations and three persons. Allegations in both complaints center on investors being “solicited” on social media—including via WhatsApp, LinkedIn, and Instagram—part of a “relationship investment scam.”
Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a Tuesday statement, “Relationship investment scams, including those involving crypto asset investments, pose a risk of catastrophic harm to retail investors, and the threat is rapidly increasing as these scams become more popular with fraudsters.”
A growing issue in the crypto market are romance scams, a sort of confidence ploy frequently known as “pig butchering.” Some estimates place victims bilked out of $75 billion between 2020 and the start of this year. To address the growing threat of these frauds, the Commodity Futures Trading Commission declared last week that it was collaborating with federal and state authorities, including the SEC.
People used WhatsApp groups to pass themselves as “financial industry professionals” from October 2023 until June 2024, luring clients to invest via a phony cryptocurrency platform named NanoBit.
“NanoBit reportedly misled investors that its affiliate, NanobitUS Securities, was an SEC-registered broker, therefore convincing them that the platform was safe”. The SEC added, “The alleged financial experts then promoted fictitious initial coin offers as a means for the investors to earn significant profits.”
Investors’ money went to “scheme participants,” who subsequently moved more than $2 million to Hong Kong via bank accounts instead of making money.
Regarding CoinW6, the SEC claims participants in the scheme contacted victim investors via LinkedIn and Instagram while also pursuing “romantic relationships over WhatsApp,” posing as wealthy young professionals. From CoinW6’s staking, mining, and other goods, the alleged scammers claimed investors could make as much as 3% daily.
“In reality, investors’ funds were misappropriated, and their ostensible investments, profits, and account balances were fictitious,” the SEC declared. “When investors tried to withdraw their purported profits, the schemers reportedly demanded additional payments for taxes or fees, told investors that the crypto assets were frozen as part of a law enforcement inquiry, or tried to blackmail them using compromising romantic communications over WhatsApp.”
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