SEC Wins $5.4M Judgment in NanoBit Crypto Fraud

The U.S. Securities and Exchange Commission (SEC) secured a default judgment of $5.4 million against NanoBit Inc. and its founder, Daniel J. Johnson Jr., on March 18, 2024. The SEC's complaint, filed in the U.S. District Court for the Southern District of Florida, alleged that NanoBit operated a fraudulent cryptocurrency trading platform. The platform was purportedly fake, and investors were led to believe their funds were being used for legitimate trading activities.

According to the SEC's allegations, NanoBit and Johnson misappropriated hundreds of thousands of dollars in investor funds. These funds were instead used for personal expenses and other unauthorized purposes, rather than for the promised cryptocurrency trading. The SEC sought to bar Johnson from acting as an officer or director of any public company and from participating in any offering of securities.

The judgment includes disgorgement of $3,728,404.97, prejudgment interest of $1,019,840.00, and a civil penalty of $651,755.03, totaling $5,400,000. This action underscores the SEC's ongoing efforts to protect investors from fraudulent schemes within the digital asset space. The case highlights the risks associated with unregistered securities offerings and the importance of due diligence for cryptocurrency investors.