NY Attorney General Sues Crypto Trader NovaTech, Reveals $1B Fraud
New York Attorney General Letitia James has filed a lawsuit alleging that hundreds of thousands of people lost more than $1 billion to two crypto firms with overlapping founders. The suit names as defendants cryptocurrency trading company Novatek, its founders Cynthia and Eddie Pission, defunct cryptocurrency mining company AWS Mining, and related individuals and companies.
According to the lawsuit, more than 11,000 New York State residents, particularly members of New York's Haitian community, lost tens of millions of dollars investing in Novatek. The lawsuit alleges that Novatek was a Ponzi scheme that used religious appeals to attract customers.
Novatek misrepresented its licensing and registration status, the lawsuit alleges. The company was registered in Saint Vincent and the Grenadines until that country's Financial Services Authority canceled it in January 2023. The company collapsed in May 2023.
They have been accused of fraud in the past.
Prior to founding Novatek, petitioners were among the founders of AWS Mining, which was shut down in 2019.
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In the year Between 2019 and 2023, more than $1 billion was invested in the company, but only $26 million was traded, the lawsuit said. James is seeking dissolution and damages and to enjoin AWS Mining, NovaTech and Petions from doing business in New York. James said in a statement.
“We're seeing unregulated cryptocurrency platforms with schemes like this, but New Yorkers can rest assured that we're using the tools at our disposal to crack down on crypto fraudsters.”
Other possible fraudulent relationships
The NovaTech website is active at the time of this writing. In it, Cynthia Petion said the company's money was lost in the data breach and the company is in the process of recovering it. Judging by what was found on X, the company began to say it was hacked in May 2023.
Novatec, a South African company that used the same logo as Petion's company and featured Cynthia Petion's photo on its Facebook page, was active in 2022 and 2023.
The Texas State Securities Board issued a cease-and-desist order in 2018 against a crypto company called AWS Mining, and it was engaging in similar tactics to a company that Pishion was involved in, but the petitions were not cited in that action.
Magazine: NY Sues Crypto Firms, FTX Nishad's 75-Year Jail, and Grayscale's New BTC File: Hodler's Digest, October 15-21
