New York Sues NovaTech for $1B Crypto Pyramid Scheme

NovaTechFx is a bitcoin trade business that is being sued by New York Attorney General Letitia James for allegedly running an illegal pyramid scheme that scammed more than a billion dollars from hundreds of thousands of participants. Over 11,000 people in New York are impacted, mostly from immigrant groups, especially the Haitian community.

The case shows that Cynthia and Eddy Petion, the owners of NovaTechFx, took advantage of the trust of these groups by breaking into WhatsApp talks and prayer groups. Advertisements were written in Creole, and religious themes were used to get people to spend without them knowing it. They promised high yields. This focused method played on the hopes and trust of minority groups, which made the scam even more sneaky.

NovaTechFx was created after the failure of AWS Mining, which was another scam that the Petions helped to start. AWS Mining told investors it would give them returns of 15-20% per month and 200 percent in 15 months, but it wasn't able to make enough money to keep these claims. In 2019, it fell apart, causing owners to lose a lot of money. Even though this failed, the Petions went on to start NovaTechFx and kept up their dishonest behavior.

Between 2019 and 2023, people put more than a billion dollars worth of coins into NovaTechFx. That being said, the claim says that less than $26 million of this amount was actually traded on NovaTech's website. The money was mostly used to repay people who had invested before, which is a typical trait of a pyramid scam. The company lied about being a qualified hedge fund dealer and said it had a license to trade cryptocurrency in the U.S., which led more buyers astray.

NovaTechFx offered trade gains every week and bonuses for new employees. The promise of quick, high returns drew more people in. These gains, on the other hand, were fake. The money given to owners came from new investments, not real trade profits. NovaTech eventually went out of business in May 2023 because its business plan couldn't keep going. Tens of thousands of investors lost their money and couldn't get it back.

In the past, the Attorney General's office has taken strong action against bitcoin companies that were not what they seemed to be. Attorney General James recently got other crypto companies to pay large fines. One of these is a $2 billion payment from Genesis Global Capital. KuCoin paid more than $22 million for not being registered properly, and Coin Cafe paid $4.3 million for similar violations.

Attorney General James said that the government is committed to keeping New Yorkers safe from scams, especially those that take advantage of weak neighborhoods. NovaTechFx is being sued to hold its owners responsible and get back the money that was stolen so that the many people who fell for this complicated coin scam can get justice.

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