NYAG files $1B lawsuit against crypto scam

New York Attorney General Letitia James has filed a lawsuit against crypto trading company NovaTechFx and digital asset mining company AWS Mining, alleging their involvement in illegal pyramid schemes that defrauded over 11,000 individuals and hundreds of thousands of investors, resulting in losses exceeding $1 billion in cryptocurrency.

The lawsuit specifically targets NovaTechFx, its founders Cynthia and Eddy Petion, and AWS Mining for orchestrating pyramid schemes that enticed investors, primarily from immigrant communities such as Haitian New Yorkers, with false promises of substantial returns on investments. The schemes were promoted through various channels, including prayer groups, social media, and WhatsApp group chats.

AWS Mining allegedly promised monthly returns of 15-20% and generous bonuses for recruiting new investors. After its collapse, the Petions founded NovaTechFx, which similarly promised high returns and recruitment bonuses, targeting minority communities.

The Attorney General's investigation revealed that between 2019 and 2023, investors deposited over $1 billion in cryptocurrency into NovaTech, but less than $26 million was actually traded on their platform. The lawsuit aims to prohibit the companies and their founders from conducting securities or commodities-related business in New York and to secure disgorgement and damages for the victims.

This legal action underscores the risks of unregulated cryptocurrency platforms and the exploitation of vulnerable communities. Attorney General James stressed the importance of protecting these communities from fraud and holding those responsible accountable.

Our Opinion:

The fact that only a small fraction of the invested funds were actually traded on NovaTech's cryptocurrency trading platform raises serious questions about the legitimacy of their operations and the true intentions behind their business model. Regulatory authorities must investigate and take action against such fraudulent activities to protect investors and maintain the integrity of the alternative finance industry.

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