New York Attorney General Sues Crypto Firms over $1B 

The Attorney sued two cryptocurrency companies that are major players of the digital asset industry

According to a lawsuit that was filed on Thursday, a crypto exchange generated fake returns using old investor money and drew $1 Billion from their investors. New York Attorney General Letitia James has levied another billion-dollar lawsuit against scammers in the state that she says defrauded hundreds of thousands of investors.

The Attorney sued two cryptocurrency companies that are major players of the digital asset industry. Indulging in a fraud scheme, the companies were lying to investors and concealing losses. 

General Letitia James filed a case against the founders Cynthia and Eddy Petion of cryptocurrency trading company NovaTechFx (Nova Tech) and cryptocurrency mining company AWS Mining Pty Ltd. (AWS Mining) for dealing in illegal pyramid schemes that defrauded hundreds of thousands of investors worth more than a billion dollars. Among those investors were 11,000 New Yorkers as well. Victims were cheated by preying on the religious faith of people from Haitian and other immigrant communities.

The lawsuit states that the companies were focused on the immigrant communities, especially Haitian New Yokers. They targeted these victims through prayer groups, social media and Whatsapp group chats making them false promises of higher returns on investments and never delivered to those made promised profits. 

“These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings,” said James, noting their use of common crypto scam channels including social media and WhatsApp groups. 

It was found in an investigation by the Office of the Attorney General (OAG) that since 2019 to 2023, last year, the investors have deposited over $1 billion dollars worth of cryptocurrency in NovaTech. Further findings said that only a fraction less than $26 million was actually traded from the trading platform of NovaTech’s cryptocurrency. In addition to requesting disgorgement and damages, Attorney General James seeks to ban AWS Mining, NovaTech, and its founders from conducting business in New York.

Attorney general James said that thousands of New Yorkers asked to trust NovaTech and AWS Mining with their money but were falsely promised better lives and delivered nothing but lies. “We are seeing the real dangers of unregulated cryptocurrency platforms with schemes like these, but New Yorkers can rest assured that we will use the tools at our disposal to crack down on crypto fraudsters” she added. 

People from New York City, Long Island, Rockland, Westchester and Orange counties have trusted and invested in NovaTech and AWS Mining resulting in a total number of 11,000 New Yorkers. The lawsuit accused AWS Mining of being a scamming scheme to generate high returns by a process in which specialized computers verify transactions in cryptocurrency and generate new ones for investors. 

As returns they were promised 15 to 20% monthly, 200% returns on investments within the 15 months of investing, and additional bonuses for bringing in new investors by AWS Mining and its promoters. The promoters include Cynthia and Eddy Petion, James Corbett, Martin Zizi, and Frantz Ciceron. The 12 defendants include NovaTech co-founders Cynthia and Eddy Petion, a married couple now allegedly living in Panama. However, the business failed in 2019 and cost investors millions of dollars in damages since it was unable to provide the promised monthly profits and hiring incentives.

Attorney General James has been protecting investors nationwide in the digital asset industry. Last month, defrauded victims were saved from the cryptocurrency company, Genesis Global Capital and secured $2 billion. In December, last year, the Attorney General secured $22 million from one of the biggest cryptocurrency trading platforms, KuCoin that has misrepresented itself as a cryptocurrency exchange and neglected to register as a securities and commodities broker-dealer. There have been many more similar cases categorized as fraud in the industry.