The New York Attorney General (NYAG) Letitia James has recently taken legal action against two cryptocurrency firms, NovaTechFx and AWS Mining, for allegedly defrauding over 11,000 individuals in a pyramid scheme, resulting in losses exceeding $1 billion. The lawsuit, filed on Jun. 6, targets NovaTechFx, its founders Cynthia and Eddy Petion, and AWS Mining Pty Ltd. for orchestrating illegal pyramid schemes that targeted immigrant communities, particularly Haitian New Yorkers, through prayer groups, social media, and WhatsApp, with false promises of high investment returns.
According to the press release issued by the NYAG, an investigation revealed that from 2019 to 2023, investors deposited over $1 billion in cryptocurrencies with NovaTechFx, but only less than $26 million was actually traded. The NYAG’s complaint alleges that AWS Mining, a purported fraudulent scheme claiming to generate high returns through crypto mining, collapsed in 2019 after failing to deliver promised profits. Subsequently, the Petions established NovaTechFx, which also recruited new investors with similar promises of high returns, despite misrepresenting its operations as a registered hedge fund broker licensed to trade crypto in the U.S.
The lawsuit further details that NovaTechFx’s weekly profits were allegedly fabricated, with payments coming from other investors’ money. The company collapsed in May 2023, leaving tens of thousands of investors unable to withdraw their crypto funds. NYAG Letitia James has accused the Petions of violating the Martin Act and is seeking to ban AWS Mining, NovaTechFx, and their founders from conducting business in New York, as well as securing disgorgement and damages for the affected investors. James stated, “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.”
This legal action taken by the New York Attorney General sheds light on the dangers of fraudulent cryptocurrency schemes that target vulnerable communities, preying on individuals seeking financial freedom. The lawsuit serves as a warning to other unscrupulous cryptocurrency firms engaging in fraudulent activities, emphasizing the need for regulatory oversight to protect investors from falling victim to such schemes. The alleged actions of NovaTechFx and AWS Mining highlight the importance of conducting thorough due diligence before investing in any cryptocurrency firm, to avoid potential losses and financial harm.
In response to these allegations, NovaTechFx and AWS Mining have yet to publicly comment on the lawsuit filed by the NYAG. The legal proceedings will likely unfold in the coming months, shedding more light on the extent of the alleged fraudulent activities carried out by these cryptocurrency firms. As the case progresses, crypto investors and the broader financial community will closely monitor the outcome of this lawsuit, hoping for justice to be served and accountability to be upheld for those responsible for defrauding thousands of individuals out of over $1 billion in investments.
NYAG Letitia James’ lawsuit against NovaTechFx and AWS Mining serves as a reminder of the importance of regulatory oversight in the cryptocurrency industry to protect investors from falling victim to fraudulent schemes. As the legal proceedings continue, it is crucial for investors to exercise caution and conduct thorough due diligence before investing in any cryptocurrency firm to avoid potential financial harm. The outcome of this lawsuit will have significant implications for the cryptocurrency market and underscore the need for transparency and accountability in the industry.
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