The United States Securities and Exchange Commission (SEC) has taken its first-ever legal action against scammers accused of operating fake cryptocurrency trading platforms. The SEC announced on 17 September that it had charged five entities and three individuals allegedly involved in defrauding investors of nearly $3.2 million through social media. According to the SEC, the fraudsters gained investors’ trust by posing as attractive professionals and enticing them into bogus crypto investment schemes.
The two fraudulent exchanges, NanoBit and CoinW6, were at the centre of the scams. CoinW6 alone reportedly conned 11 people out of over $2.2 million by convincing them to invest in fictitious products like staking and yield farming. Investors were later blackmailed with threats to leak personal messages when they tried to withdraw their funds. Similarly, NanoBit is accused of tricking 18 victims into investing approximately $968,000, claiming its affiliate was a registered broker to build credibility.
The SEC’s legal action seeks to impose penalties, permanent injunctions, and the return of stolen funds from the alleged fraudsters. The case highlights the growing threat of scams targeting unsuspecting investors via social media.