Litigation Releases (NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, Fei Liao, and Hua Zhao)

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26110 / September 17, 2024

Securities and Exchange Commission v. NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, Fei Liao, and Hua Zhao

, No. 2:24-cv-06517 (E.D.N.Y. filed Sept. 17, 2024)

SEC Charges Four Entities and Three Individuals in Relationship Investment Scam

The Securities and Exchange Commission today charged four entities and three individuals in connection with a relationship investment scam involving the alleged fake crypto asset trading platform NanoBit. The SEC's complaint alleges that defendants, working with other scheme participants, solicited investors via social media apps, lied to them to gain their trust and confidence, and then stole their money. This case is among the SEC's first enforcement actions alleging these types of scams.

The SEC's complaint alleges that from approximately October 2023 to at least June 2024, scheme participants impersonated financial industry professionals in WhatsApp groups to build investors' trust and then solicited their investments through the supposed NanoBit crypto asset trading platform. In order to persuade investors that the platform was safe, NanoBit allegedly falsely claimed that its affiliate, NanobitUS Securities, was a SEC-registered broker. The supposed financial professionals allegedly then touted fake initial coin offerings as a way for the investors to make substantial returns. But, as alleged, the NanoBit platform was fake and investors' funds in fact went to scheme participants who wired more than $2 million to bank accounts in Hong Kong and misappropriated hundreds of thousands of dollars' worth of investors' crypto assets.

The complaint, filed in U.S. District Court for the Eastern District of New York, charges NanoBit Limited, Radiant Horizons Limited, Sweet Karma Fashion Inc., Zhao Tropical Deli Inc., Jiajie Liu, Fei Liao, and Hua Zhao with violating the antifraud provisions of the federal securities laws. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against each defendant.

The investigation was conducted by Jeremy Brandt, Michael DiBattista, and Neil Hendelman of the New York Regional Office and was supervised by Rebecca Reilly and Sheldon L. Pollock. The litigation is being conducted by Todd Brody and Jeremy Brandt and being supervised by Alexander Vasilescu.

The SEC's Office of Investor Education and Advocacy, in collaboration with the CFTC's Office of Customer Education and Outreach, FINRA, and NASAA, has issued anInvestor Alertabout these scams, warning that fraudsters may reach out to investors and slowly build trust before convincing them to "invest" their money and then defrauding them through fake investments.

The SEC encourages investors to check the backgrounds of anyone selling or offering them an investment usingInvestor.gov.