The US SEC brought two ‘fake crypto ecosystems’ involved in pig butchering scams to an end while issuing charges against multiple entities and numerous individuals.
The US Securities and Exchange Commission took its first action against pig butchering scams this week, suing multiple entities and individuals to bring down two fake exchanges. These scams targeted individuals online on platforms like WhatsApp, LinkedIn, and Instagram to put a wedge between them and their funds. While one took the romance approach to lure investors in, the other stuck to conning investors by promising mouth-watering financial returns, with the former being CoinW6 and the latter NanoBit.
The SEC Warns of Rising Pig Butchering Scams
The SEC took them down, sending a message to such scammers about these tactics not being welcome. A release issued by the regulator read, “The SEC’s two complaints allege that the defendants solicited investors via social media apps, lied to them to gain their trust and confidence, and then stole their money.” Its Director of Division of Enforcement, Gurbir Grewal, said, “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.”
According to the agency’s court filings related to the suit it brought against CoinW6, the SEC said those involved sparked romantic connections with victims over LinkedIn and Instagram, further taking the conversations to WhatsApp. There, they would introduce CoinW6 as an investment opportunity, claiming they made hundreds of thousands of dollars by trading the products offered by the platform.
The scammers also threw figures like 2-3% in daily returns. Those falling for the scam were asked to purchase stablecoins and send them to the platform. In reality, none of the victims got any of their funds back, let alone returns. As the victims tried to reclaim their funds, the scammers would threaten them by claiming to leak their messages to their families and employees. Furthermore, CoinW6 shut down existing websites when investors would ask for withdrawals and move their scheme to other domains.
Bad actors tied to the NanoBit racket connected with victims on WhatsApp group chats, pretending to be financial experts and successfully stealing $968,000 from 18 individuals. They even claimed that NanoBit’s US affiliate, NanoBitUS Securities, was licensed by the SEC to gain credibility. The fraudulent platform funneled investor funds to Hong Kong-based bank accounts while keeping investors from withdrawing funds by conjuring outlandish bills they owed before reclaiming their funds. One such claim involved a user receiving a $11,000 tab for “Ghana miner fees.”
