New York Attorney General Sues Crypto Firms for $1B Pyramid Scheme

New York Attorney General Letitia James has filed a lawsuit against crypto firms NovaTechFx and AWS Mining, accusing them of defrauding over 11,000 individuals of more than $1 billion in a pyramid scheme.

On June 6, Letitia James took legal action against NovaTechFx, its founders Cynthia and Eddy Petion, and AWS Mining Pty Ltd., alleging that these companies orchestrated illegal pyramid schemes. The lawsuit claims that these schemes led to significant financial losses for more than 11,000 New Yorkers.

The New York Attorney General’s Office press release states that NovaTech and AWS Mining targeted immigrant communities, especially Haitian New Yorkers, through prayer groups, social media, and WhatsApp. The companies allegedly made fraudulent promises of high investment returns to entice these communities.

An investigation conducted by the Office of the Attorney General revealed that from 2019 to 2023, investors deposited over $1 billion in crypto with NovaTech. However, less than $26 million of these funds were actually traded.

“Thousands of New Yorkers were falsely promised better lives if they simply trusted NovaTech and AWS Mining with their money, but it was all a lie. These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings.” – Letitia James

The complaint indicates that AWS Mining, allegedly a fraudulent scheme, promised high returns through crypto mining but failed to deliver, ultimately collapsing in 2019. Following this, the Petions founded NovaTech, which also allegedly recruited new investors with promises of high returns.

Despite marketing NovaTech as a registered hedge fund broker licensed to trade crypto in the U.S., the lawsuit claims the company misrepresented its operations. The weekly profits were allegedly fabricated, and payments were made using other investors’ money. NovaTech collapsed in May 2023, leaving tens of thousands of investors unable to withdraw their crypto funds.

James seeks to ban AWS Mining, NovaTech, and their founders from conducting business in New York. Additionally, she aims to secure disgorgement and damages for the affected investors.

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