New York AG Letitia James has sued crypto firms NovaTechFx and AWS Mining for allegedly defrauding over 11,000 individuals out of more than $1 billion in a pyramid scheme.

New York Attorney General (NYAG) Letitia James filed a lawsuit on Jun. 6 against two crypto trading firms NovaTechFx, its founders Cynthia and Eddy Petion, and AWS Mining Pty Ltd. for allegedly orchestrating illegal pyramid schemes that defrauded over 11,000 New Yorkers and resulted in losses exceeding $1 billion.

The press release published by the NYAG claims NovaTech and AWS Mining had been targeting immigrant communities, particularly Haitian New Yorkers, through prayer groups, social media, and WhatsApp, making fraudulent promises of high investment returns.

An investigation by the Office of the Attorney General revealed that from 2019 to 2023, investors deposited over $1 billion in crypto with NovaTech, but less than $26 million was actually traded.

“Thousands of New Yorkers were falsely promised better lives if they simply trusted NovaTech and AWS Mining with their money, but it was all a lie. These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings.”

Letitia James

You might also like: NYAG says Ethereum is security in KuCoin lawsuit

The complaint details that AWS Mining, allegedly a fraudulent scheme, claimed to generate high returns by crypto mining but failed to deliver the promised profits, collapsing in 2019. Later on, the Petions founded NovaTech, which also allegedly recruited new investors with promises of high returns.

Despite marketing NovaTech as a registered hedge fund broker licensed to trade crypto in the U.S., the lawsuit alleges the company misrepresented its operations as the weekly profits “were made up and the payments came from other investors’ money.” NovaTech collapsed in May 2023, and tens of thousands of investors were unable to withdraw their crypto funds, the complaint reads.

Accusing the Petions of violating the Martin Act, James seeks to ban AWS Mining, NovaTech, and their founders from conducting business in New York, in addition to securing disgorgement and damages.

Read more: CoinEx sued by NYAG for failing to register in the state