Ponzi

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James

New York Attorney General Letitia James has filed a suit alleging that hundreds of thousands of people lost over $1 billion to two crypto firms with overlapping founders. The suit names cryptocurrency trading company NovaTech, its founders Cynthia and Eddy Petion, defunct cryptocurrency mining company AWS Mining and associated individuals and companies as defendants.&nbsp;
According to the <a href="https://ag.ny.gov/sites/default/files/court-filings/not_assigned_people_of_the_state_of_v_people_of_the_state_of_complaint_2.pdf" target="_blank" rel="noopener noreferrer nofollow">suit</a>, more than 11,000 New York state residents, particularly members of the New York Haitian community, lost tens of millions of dollars by investing in NovaTech. The suit alleges that NovaTech is a Ponzi scheme that has used religious appeals to attract customers.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-06/c76d9077-e12c-4868-84f6-6e6b2c65425a.png" alt="" title="">
 <figcaption style="text-align: center;">Illustration from the suit against NovaTech. Source: ny.ag.gov
 </figcaption>
</figure>
NovaTech also misrepresented its licensing and registration status, the suit alleges. The company was registered in St. Vincent and the Grenadines until that country’s Financial Services Authority canceled it in January 2023. The company collapsed in May 2023.
<h2 id="earlier-fraudulent-activity-alleged">Earlier fraudulent activity alleged</h2>
Before founding NovaTech, the Petions were among the founders of AWS Mining, which closed in 2019. Allegedly, that company was also a Ponzi scheme but was unable to generate enough income to provide the returns it promised.
Related: <a href="https://cointelegraph.com/news/new-york-settlement-genesis-fraud" rel="noopener noreferrer nofollow">New York AG reaches $2B settlement with Genesis ‘for defrauded victims’</a>
Over $1 billion in cryptocurrency was deposited in the company between its founding in 2019 and 2023, but only $26 million was traded, the suit alleges. James is seeking disgorgement and damages and to ban AWS Mining, NovaTech and the Petions from doing business in New York. James <a href="https://ag.ny.gov/press-release/2024/attorney-general-james-sues-cryptocurrency-companies-novatechfx-and-aws-mining" target="_blank" rel="noopener noreferrer nofollow">said</a> in a statement:
<blockquote>
 “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."
</blockquote>
<h2 id="other-potential-fraudulent-connections">Other potential fraudulent connections&nbsp;</h2>
The NovaTech website is active at the time of writing. On it, Cynthia Petion claims that the company’s funds were lost in a data breach, and the company is in the process of recovering them. Judging from material available on X, the company <a href="https://x.com/F89579Freedom/status/1664117778994061312" target="_blank" rel="noopener noreferrer nofollow">began</a> claiming it was hacked in May 2023. 
<figure><img src="https://s3.cointelegraph.com/uploads/2024-06/e135cfb2-a67b-4485-95ed-76005d9a50e7.png" alt="" title="">
 <figcaption style="text-align: center;">Source: novatech-fx.com
 </figcaption>
</figure>
A company in South Africa called NovaTech, which <a href="https://www.facebook.com/Monde.Novatech/" target="_blank" rel="noopener noreferrer nofollow">used</a> the same logo as the Petions’ company and displayed Cynthia Petion’s picture on its Facebook page,&nbsp;was <a href="https://x.com/NovaTechMzansi/status/1616016947690209281" target="_blank" rel="noopener noreferrer nofollow">active</a> in 2022 and 2023.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-06/ada9ccd7-07de-4ee4-8a77-1776909b1ed9.png" alt="" title="">
 <figcaption style="text-align: center;">Source: Unlimited Freedom
 </figcaption>
</figure>
The Texas State Securities Board <a href="https://cointelegraph.com/news/texas-regulator-issues-cease-and-desist-order-to-cloud-mining-company" rel="noopener noreferrer nofollow">issued a cease-and-desist</a> order in 2018 against a crypto company called AWS Mining that was accused of operating tactics similar to the company the Petions were involved in, but the Petions were not mentioned in that action.
Magazine: <a href="https://cointelegraph.com/magazine/ny-sues-crypto-firms-ftxs-nishad-faces-75-years-in-jail-and-grayscales-new-btc-filing-hodlers-digest-oct-15-21/" rel="noopener noreferrer nofollow">NY sues crypto firms, FTX’s Nishad faces 75 years in jail, and Grayscale’s new BTC filing: Hodler’s Digest, Oct. 15-21</a>

NY Attorney General sues crypto trader NovaTech, claims $1B fraud

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