New York Attorney General Letitia James has filed a lawsuit against cryptocurrency trading company NovaTechFx and its founders, along with AWS Mining Pty Ltd., for allegedly operating illegal pyramid schemes that defrauded hundreds of thousands of investors. The lawsuit accuses the companies of targeting vulnerable communities, particularly Haitian immigrants in New York, through social media and prayer groups, promising high returns on cryptocurrency investments that were never realized.
The investigation revealed that from 2019 to 2023, investors deposited over one billion dollars in cryptocurrency with NovaTech, but less than $26 million was actually traded on its platform. The lawsuit claims that the companies fabricated profits and used new investors’ money to pay off earlier investors, a classic hallmark of a pyramid scheme. The scheme collapsed in May 2023, leaving tens of thousands of investors unable to withdraw their funds.
Attorney General James is seeking to ban NovaTechFx, AWS Mining, and their founders from conducting any business related to securities or commodities in New York. She also aims to secure damages and restitution for the victims who lost their life savings in the fraudulent schemes. The lawsuit highlights the ongoing risks associated with unregulated cryptocurrency platforms and the need for stronger protections for investors.
This legal action is part of Attorney General James’s broader efforts to crack down on cryptocurrency fraud. In recent months, she has secured significant settlements from other crypto companies, including Genesis Global Capital and KuCoin, for defrauding investors and failing to comply with regulatory requirements. The lawsuit against NovaTechFx and AWS Mining underscores her commitment to protecting New Yorkers from financial scams and ensuring justice for those affected.
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