Letitia James, the Attorney General of New York, has filed a lawsuit accusing two crypto companies with common founders of defrauding hundreds of thousands of individuals out of over $1 billion. The lawsuit targets NovaTech, a cryptocurrency trading firm, along with its founders Cynthia and Eddy Petion, the now-defunct cryptocurrency mining company AWS Mining, and various associated individuals and entities.
The lawsuit reveals that more than 11,000 residents of New York, particularly members of the Haitian community, lost tens of millions of dollars by investing in NovaTech. It alleges that NovaTech operated as a Ponzi scheme, using religious appeals to lure in investors.
In addition, the lawsuit claims that NovaTech misrepresented its licensing and registration status. The company was originally registered in St. Vincent and the Grenadines but had its registration 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. Allegedly, AWS Mining also operated as a Ponzi scheme and failed to generate the promised returns.
Between 2019 and 2023, over $1 billion in cryptocurrency was deposited into AWS Mining, but only $26 million was actually traded. Letitia James is seeking disgorgement, damages, and a ban on AWS Mining, NovaTech, and the Petions from conducting business in New York.
The NovaTech website remains active, where Cynthia Petion claims that the company’s funds were lost due to a data breach and are currently being recovered. However, information indicates that claims of a hack first emerged in May 2023.
Interestingly, a South African company called NovaTech, bearing a resemblance to the Petions’ company, was operational in 2022 and 2023. This company shared the same logo and featured Cynthia Petion’s image on its Facebook page.
Furthermore, the Texas State Securities Board issued a cease-and-desist order in 2018 against a crypto company named AWS Mining for similar practices, although the Petions were not implicated in that particular action.
In summary, the lawsuit filed by Letitia James against these crypto firms sheds light on a complex web of fraudulent activities, raising concerns about potential connections between these entities.