New York Attorney General Sues Promoters Over $1B Crypto Pyramid Schemes

Published: Jun 7, 2024
Written By:
Vignesh Karunanidhi
Milk Road Writer

New York Attorney General Letitia James has filed a lawsuit against two companies and their promoters. The lawsuit was filed for allegedly orchestrating crypto pyramid schemes that defrauded investors, primarily of Haitian descent, of more than $1 billion.

The complaint names defendants Cynthia Petion, her husband Eddy Petion, and others as the perpetrators of the massive fraud.

Key points:

  • The defendants are accused of promoting two fraudulent schemes: AWS Mining and NovaTech.
  • AWS Mining collapsed in April 2019, while NovaTech operated from August 2019 through April 2023.
  • Investors deposited over $1 billion worth of cryptocurrency into NovaTech, but only $26 million was traded on the platform.
  • The schemes targeted investors of Haitian descent, using Creole language and religious faith to lure victims.
  • In June 2022, the defendants fled to Panama, transferring tens of millions of dollars worth of cryptocurrency out of NovaTech.

According to the complaint, the defendants were involved in a fraud targeting the Haitian community. They also promoted the schemes to investors in the Creole language and exploited their religious faith.  

Also read: Kraken Considers Pre-IPO Funding Round Amid Crypto Market Rally

The Crypto pyramid schemes guaranteed 200% return

The first scheme, AWS Mining, promised investors a guaranteed 200% return but ultimately collapsed in April 2019. The second and larger fraud was NovaTech. The project claimed to be a crypto and foreign exchange trading platform.

Investors pooled in over $1 billion worth of cryptocurrency into NovaTech between August 2019 and April 2023. However, only $26 million was actually traded on the platform.

Attorney General James described both schemes as pyramid schemes. NovaTech was also labeled as a Ponzi scheme. This is because investors were promised profits from cryptocurrency trading but were instead paid from the cryptocurrency assets of other investors.

As the schemes began to unravel, the defendants secretly sold their house in Florida and fled to Panama in June 2022. 

Vignesh Karunanidhi

Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.

Vignesh Karunanidhi
Milk Road Writer
Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.