2024

motion

Ponzi

James

<p>New York Attorney General Letitia James has asked a court to compel the founders of the defunct crypto and forex trading platform NovaTech—Cynthia and Eddy Petion—and related entities to pay $1.37 billion tied to a Ponzi scheme. The request follows a default ruling issued after the defendants did not respond to the lawsuit.</p>
<p>According to a Thursday court filing, the AG seeks the return of roughly $1.13 billion in investor funds, plus $232.5 million in interest. If granted, the judgment would mark another major enforcement action aimed at recovering losses for victims of NovaTech and a related scheme, AWS Mining.</p>
<h2 id="key-takeaways">Key takeaways</h2>
<ul>
 <li>The New York AG is seeking a $1.37 billion court order against NovaTech founders Cynthia and Eddy Petion and associated companies.</li>
 <li>The filing requests $1.13 billion in returned investor funds plus $232.5 million in interest.</li>
 <li>Default liability was entered in August 2025 after defendants failed to respond to the AG’s lawsuit.</li>
 <li>The complaint alleges roughly $1.16 billion was deposited into NovaTech crypto wallets from August 2019 to May 2023, with only about $26 million routed to the trading provider B2Broker.</li>
 <li>The motion also asks for about $6.15 million, including interest, relating to AWS Mining, which collapsed in 2019.</li>
</ul>
<h2 id="default-ruling-sets-up-a-recovery-push">Default ruling sets up a recovery push</h2>
<p>The AG’s latest move comes after the court found the Petions and related entities liable by default in August 2025. Default judgments typically occur when defendants do not participate in the litigation, leaving the court to decide based on the evidence and claims presented by the plaintiff—in this case, the New York Attorney General’s Office.</p>
<p>In its Thursday filing, the Attorney General frames the request as a path toward returning investor funds and compensating victims for the delay and value lost over time through interest. For investors, these steps matter because a favorable ruling is often a prerequisite for meaningful recovery efforts, including potential asset tracing and enforcement actions.</p>
<h2 id="how-novatech-allegedly-operated">How NovaTech allegedly operated</h2>
<p>In describing the scheme, the AG’s office said more than 11,000 New Yorkers lost tens of millions of dollars through NovaTech and an earlier crypto mining operation known as AWS Mining. The complaint alleges promoters targeted Haitian and other immigrant communities, using prayer groups as well as social media and WhatsApp channels to market the program.</p>
<p>According to the AG, the promotional pitch included promises of high returns and recruitment bonuses—elements commonly associated with Ponzi-style schemes because they incentivize early participants to bring in others, often regardless of any legitimate underlying trading or investment activity.</p>
<p>The filing further states that investors deposited about $1.16 billion into NovaTech’s crypto wallets between August 2019 and May 2023. Yet, only about $26 million of that amount was deposited with the platform’s trading provider, B2Broker, for trading, as described by the attorney general. The large discrepancy is central to the AG’s argument that the platform did not operate as a bona fide trading service.</p>
<h2 id="deposits-trading-flows-and-the-gap-investors-couldn-t-withdraw">Deposits, trading flows, and the gap investors couldn’t withdraw</h2>
<p>The AG’s account of fund flows may help explain why withdrawals became impossible when the platform collapsed. NovaTech ultimately went down in 2023, leaving tens of thousands of investors unable to access their money.</p>
<p>While the filing’s figures focus on wallet deposits and routing to the trading provider, the practical takeaway for investors is that “on-chain” activity alone does not confirm legitimate investment outcomes. In NovaTech’s case, the AG alleges that most of the money was not used for trading in the way customers were led to believe.</p>
<p>The motion therefore seeks not only to establish responsibility but also to quantify damages. By asking for both the return of principal and interest, the Attorney General’s office is effectively arguing that victims should be made whole as closely as possible for the funds tied up over years.</p>
<h2 id="a-second-target-aws-mining-and-related-losses">A second target: AWS Mining and related losses</h2>
<p>Alongside NovaTech, the Attorney General’s motion also extends to AWS Mining. The filing separately seeks about $6.15 million, including interest, over the earlier scheme.</p>
<p>As described in the AG’s broader case, AWS Mining collapsed in 2019. NovaTech then collapsed in 2023. The two failures are linked in the complaint, and the AG’s efforts reflect a broader pattern of enforcement aimed at recovering funds across multiple related offerings.</p>
<p>The Petions and related entities were sued as part of the AG’s action filed in June 2024 against NovaTech, AWS Mining, and other associated companies. Earlier coverage from <a rel="noopener noreferrer nofollow" href="https://sovrn.co/1h8llaz">Cointelegraph</a> discussed the lawsuit and the alleged issues surrounding NovaTech’s representations.</p>
<h2 id="settlement-activity-shows-parallel-pressure-on-promoters">Settlement activity shows parallel pressure on promoters</h2>
<p>Separately, four individuals who allegedly recruited investors into NovaTech agreed to pay nearly $6 million in settlements designed to benefit victims, according to the New York Attorney General’s Office. While that amount is far smaller than the $1.37 billion request directed at the founders and related entities, settlements can still play an important role in victim recovery and can reduce the number of remaining disputes.</p>
<p>For victims, the larger question is how any recovered funds—whether from settlements or from enforcement of a judgment—are allocated. <a rel="noopener noreferrer nofollow" href="https://sovrn.co/1h8llaz">Cointelegraph</a> reported that it sought comment from the New York Attorney General’s Office on distribution mechanics and enforcement steps, but had not received a response by the time of publication.</p>
<h2 id="what-happens-next-for-enforcement-and-victim-recovery">What happens next for enforcement and victim recovery</h2>
<p>The court will need to decide whether to grant the AG’s requested order and the specific scope of the recovery amounts. Even with a judgment, investors will still need to rely on enforcement and asset recovery efforts—processes that can take time and may be influenced by the availability of recoverable funds. Readers following the case should watch for developments on how the court frames liability and how the AG plans to distribute any recovered assets to NovaTech victims.</p>
<p>This article was originally published as <a href="https://www.cryptobreaking.com/new-york-ag-wants-1/?utm_source=rss&amp;utm_medium=syndication&amp;utm_campaign=article_footer" rel="noopener noreferrer nofollow">New York AG Wants $1.37B From NovaTech Founders in Ponzi Case</a> on <a href="https://www.cryptobreaking.com/?utm_source=rss&amp;utm_medium=syndication&amp;utm_campaign=article_footer" rel="noopener noreferrer nofollow">Crypto Breaking News</a> – your trusted source for crypto news, Bitcoin news, and blockchain updates.</p>

New York AG Wants $1.37B From NovaTech Founders in Ponzi Case

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