New York sues NovaTech over $1 billion crypto pyramid scheme

Rick Steves

Cynthia and Eddy Petion targeted minority communities, Haitians in particular, in prayer groups and WhatsApp group chats with advertisements in Creole, and religious messages that appealed to their faith.

New York Attorney General Letitia James has sued cryptocurrency trading company NovaTechFx for engaging in illegal pyramid schemes that defrauded hundreds of thousands of investors, including over 11,000 New Yorkers, of over a billion dollars worth of cryptocurrency.

NovaTechFx founders Cynthia and Eddy Petion targeted immigrant communities, particularly Haitian New Yorkers, in prayer groups and through social media and WhatsApp group chats with fraudulent promises of high returns on investments, according to the lawsuit.

NovaTech launched after collapse of AWS Mining scam

From 2019 to 2023, investors deposited over one billion dollars’ worth of cryptocurrency in NovaTech but only a fraction, less than $26 million, was traded on NovaTech’s cryptocurrency trading platform.

The lawsuit also states that defendant AWS Mining was a fraudulent scheme that claimed to generate high returns for investors by mining cryptocurrency, the process by which specialized computers verify transactions in cryptocurrency and generate new cryptocurrency.

AWS Mining and its promoters, Cynthia and Eddy Petion, James Corbett, Martin Zizi, and Frantz Ciceron, promised investors 15 to 20 percent monthly returns, 200 percent returns on investments within 15 months, and bonuses for recruiting new investors.

However, the company did not generate enough returns to pay the promised monthly profits and recruitment bonuses and eventually collapsed in 2019, causing millions of dollars in losses to investors.

After the collapse of AWS Mining, Cynthia and Eddy Petion started their own cryptocurrency company, NovaTech, and relied on recruiting new investors with promises of high returns and generous recruitment bonuses. They targeted minority communities, Haitians in particular, in prayer groups and WhatsApp group chats with advertisements in Creole, and religious messages that appealed to their faith. They falsely marketed NovaTech as a registered hedge fund broker, misrepresented that NovaTech was licensed to trade cryptocurrency in the U.S., advertised high profits from trading of approximately two to four percent per week, promoted recruitment bonuses, and promised that investors could withdraw their funds and profits at any time.

NovaTech announced that it paid investors weekly trading profits. However, the weekly profits were made up and the payments came from other investors’ money. NovaTech collapsed in May 2023, and tens of thousands of investors were unable to withdraw their cryptocurrency.

NYAG’s history of harsh settlements with crypto firms

Last month, Attorney General James secured $2 billion for defrauded victims from the cryptocurrency company Genesis Global Capital.

In December 2023, Attorney General James secured more than $22 million from KuCoin, one of the largest cryptocurrency trading platforms, for failing to register as a securities and commodities broker-dealer and for falsely representing itself as a crypto exchange.

In May 2023, Attorney General James secured $4.3 million from Coin Cafe for failing to register as a commodity broker-dealer and defrauding investors.

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