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Home » New York Attorney General files lawsuit against cryptocurrency trader NovaTech alleging 1 billion fraud
New York Attorney General files lawsuit against cryptocurrency trader NovaTech alleging 1 billion fraud
New York Attorney General files lawsuit against cryptocurrency trader NovaTech alleging 1 billion fraud

New York Attorney General files lawsuit against cryptocurrency trader NovaTech alleging 1 billion fraud

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By admin on 2024-06-06 Regulations Security

New York’s Attorney General, Letitia James, has filed a lawsuit alleging that two cryptocurrency firms, with founders who overlap, caused hundreds of thousands of people to lose over $1 billion. The lawsuit specifically targets NovaTech, a cryptocurrency trading company, its founders Cynthia and Eddy Petion, the defunct cryptocurrency mining company AWS Mining, and other associated individuals and companies.
The lawsuit claims that more than 11,000 residents of New York, particularly members of the New York Haitian community, lost tens of millions of dollars by investing in NovaTech. Allegedly, NovaTech operated as a Ponzi scheme and used religious appeals to lure in customers.
Additionally, NovaTech is accused of misrepresenting its licensing and registration status. The company was initially registered in St. Vincent and the Grenadines, but their registration was canceled by the country’s Financial Services Authority in January 2023. NovaTech ultimately collapsed in May 2023.
Prior to launching NovaTech, the Petions were involved in AWS Mining, which shut down in 2019. AWS Mining was also believed to be a Ponzi scheme that failed to generate sufficient income to fulfill the promised returns.
According to the lawsuit, over $1 billion in cryptocurrency was deposited into NovaTech between 2019 and 2023, but only $26 million was actually traded. Letitia James is pursuing disgorgement and damages, while also seeking to prohibit AWS Mining, NovaTech, and the Petions from conducting business in New York.
In a statement, James expressed her determination to hold fraudulent entities accountable. The NovaTech website remains active, with Cynthia Petion claiming that the company’s funds were lost due to a data breach, and efforts are being made to recover them.
Moreover, a company in South Africa named NovaTech, sharing a logo with the Petions’ firm and featuring Cynthia Petion’s photo on its Facebook page, was active in 2022 and 2023.
In 2018, the Texas State Securities Board issued a cease-and-desist order against a crypto company called AWS Mining for employing tactics similar to those associated with the Petions. However, the Petions were not explicitly named in that action.
Overall, the lawsuit against the crypto firms highlights the need for increased scrutiny and regulation in the cryptocurrency industry to protect investors from fraudulent schemes.

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