In pursuit of fake crypto platforms, the US Securities and Exchange Commission (SEC) has upped the ante. According to the US media reports, the SEC launched a crackdown on two fake crypto platforms that used social media to rip off investors.
According to the details, these two crypto investment scams targeted fake crypto platforms, Nanobit and Coinw6, using fake relationships to deceive users. The SEC crackdown revealed that these scams siphoned millions of dollars from victims on social media platforms. This is the first time, the US SEC has launched an enforcement drive against these kinds of crypto scams.
SEC’s Much-Awaited Enforcement Action
The Securities and Exchange Commission charged various individuals and firms on Tuesday with relationship investment scams knitted to fake crypto platforms, Nanobit and Coinw6. As per the details, the accused were charged with using social media apps, including LinkedIn, Instagram, and WhatsApp, to lure unsuspecting investors before fleeing with their funds.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said in a statement, “These charges are the SEC’s first enforcement actions alleging these types of scams. Relationship investment scams, including those involving crypto asset investments, pose a risk of catastrophic harm to retail investors, and the threat is increasing rapidly as these scams become more popular with fraudsters.”
Mushroom Growth of Fake Crypto Investment Schemes
Over the past few years, there has been a mushroom growth of fake crypto investment schemes, ripping innocent people off of their precious savings and investments. The SEC complaint highlighted that the perpetrators of NanoBit crypto scam, posed as financial professionals on WhatsApp group from October 2023 to June 2024 to lure investors into a fake crypto trading platform.
They used the scam mint more than $2 million, Grewal said, adding, “In these two cases, we allege that fraudsters created fake crypto ecosystems that displayed false information to investors.”
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In the second case, the perpetrators used the fake crypto platform Coinw6 from July 2022 to December 2023. According the SEC officials, they developed romantic relationships with victims, eventually emotionally forcing them to pour their savings in fake crypto products on Coinw6.
The worst part: when investors wanted to withdraw their invested money, the perpetrators allegedly demanded extra payments in lieu of fees and taxes. They also allegedly told investors that their crypto assets were frozen by law enforcement agencies, demanding more money. On many occasions, the schemers blackmailed investors using compromising romantic chats (textual and visual) over WhatsApp to demand more money from them.
SEC Puts an End to the Victims’ Misery
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said that the SEC has filed charges against perpetrators of both fake crypto schemes, seeking civil penalties and permanent injunctions.
“Our allegations serve as a reminder to the public to be on heightened alert about potential scams involving investment opportunities promoted by strangers on social media,” he added.
The Final Word
NanoBit and Coinw6 are only two of the thousands of many fake crypto platforms that are using romantic relationships to mint money from innocent people worldwide. This is why it’s important to interact only with the trusted people on social media and never share personal details with anybody online. Always make sure to conduct due diligence before investing in a crypto project, especially the unknown ones.
As the US Securities and Exchange Commission starts a crackdown against fake crypto platforms and schemes, it will play a crucial role in ensuring safe trading ecosystem for crypto traders and investors. After all, nobody wants to lose their precious hard-earned money.
For more updates and developments on fake crypto platforms and schemes, stay tuned to TheBITJournal.
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