New York Attorney General Letitia James files $1 billion crypto fraud lawsuit against two companies

Crypto pyramid schemes were the basis for AG’s lawsuits against the firms. Businesses took advantage of people of faith and immigration.

Letitia James, the attorney general of New York, has filed a lawsuit against two businesses that she claims were involved in cryptocurrency pyramid schemes that stole over $1 billion from over 11,000 New Yorkers. With the promise of “financial independence,” AWS Mining and Novatechfx (Novatech) preyed on religious congregations and vulnerable immigrant populations, particularly those from Haiti.

In order to trick communities into investing in their schemes, the corporations took use of social media networks. New York Attorney General Letitia James is now seeking to restore normalcy to the industry by outlawing their illicit activities there.

Attorney General James sued the two companies and their owners, claiming that they deceived investors and caused them to lose their money. Many investors’ large quantities of money were never “engaged in lawful trading operations on their platform,” she said in her lawsuit against Novatech.

Novatech received about one billion dollars’ worth of bitcoin from investors between August 2019 and April 2023. Nevertheless, the platform only ever saw trades involving a tiny fraction of that sum, less than $26 million.

“We are seeing the grave risks associated with uncontrolled cryptocurrency platforms via scams such as these,” she further said. The goal of Attorney General James’s fight against shady companies and their founders who use deceit to steal people’s “life savings” is to rid the city of such entities. Additionally, the AG’s goal in pursuing legal action is to ensure that victims of the pyramid scams get financial compensation.

The founders of AWS Mining allegedly maintained their “practice of deceit” after the company went bankrupt in 2019 by forming Novatech and promising investors substantial profits, as detailed in AG James’ petition.

AWS Mining had previously pledged a 15% to 20% monthly return on investment (ROI) and a 200% return within 13 to 15 months prior to its collapse. The petition goes on to say that “its strategy was unsustainable” and that the promised 200% returns were false. Defendant Cynthia Petion said that the firm was unsustainable due to its “too high for too long” compensation and return policies.

Petion changed her name to “Reverend CEO” after founding Novatech and told investors that the business was God’s idea. But in their private conversations, she called herself the “Zookeeper,” and the investors “a cult.”

In response to AG James’s action, Assemblymember Clyde Vanel said that blockchain and cryptocurrencies might help more people get access to formal financial services. Unfortunately, individuals who engage in fraudulent activities also exploit them.

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