- SEC files first enforcement actions against crypto “pig butchering” scams, targeting two alleged fake exchanges.
- Scammers used social media to lure victims, pursuing personal relationships to exploit investments.
- SEC seeks permanent injunctions, penalties, and disgorgement against entities involved in fraud schemes.
The U.S. Securities and Exchange Commission (SEC) has initiated its first enforcement actions against “pig butchering” scams, targeting two fake cryptocurrency trading platforms. According to a September 17 announcement, the SEC charged five entities and three individuals tied to the alleged fraudulent exchanges NanoBit and CoinW6, accusing them of stealing approximately $3.2 million from unsuspecting investors.
The accused scammers reportedly built personal relationships with investors through social media platforms, such as LinkedIn and Instagram, before moving conversations to WhatsApp. Gurbir Grewal, director of the SEC’s Division of Enforcement, highlighted the growing prevalence of such scams, noting the importance of vigilance when considering investments promoted by strangers online.
Scammers Pretended to Be Professionals
In the case of CoinW6, the SEC claims that fraudsters posing as “young, attractive professionals” targeted at least 11 investors, promising returns of up to 3% daily on fictitious crypto services like staking and yield farming. When investors attempted to withdraw funds, they were met with demands for additional fees or were blackmailed with threats of exposing intimate WhatsApp messages.
NanoBit, another platform named in the charges, allegedly defrauded 18 investors by claiming false ties to SEC-registered brokers and shilling fake initial coin offerings. The SEC asserts that NanoBit’s operations were entirely fraudulent, with funds funneled to bank accounts in Hong Kong. Both CoinW6 and NanoBit are facing charges for violating securities laws, with the SEC seeking penalties, injunctions, and disgorgement of profits. These cases serve as a stark reminder to remain cautious when dealing with unfamiliar online investment platforms.
