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New York Attorney General Sues Two Crypto Companies Over Alleged $1,000,000,000 Ponzi Scheme
New York's Attorney General is suing two crypto firms for their alleged role in a $1 billion Ponzi scheme.
In a new press release, New York AG Letitia James announces a lawsuit against cryptocurrency exchange NovaTech and cryptocurrency mining company AWS Mining for allegedly defrauding hundreds of thousands of customers, 11,000 of whom were New York residents.
According to the complaint, between 2019 and 2023, the companies allegedly used prayer groups, social media platforms and WhatsApp chats to promise high returns on investments.
However, an investigation revealed that of the $1 billion they raised, only $26 million was used to trade digital assets through the NovaTech crypto exchange.
As James stated,
“Thousands of New Yorkers were falsely promised a better life if they would simply trust NovaTech and AWS Mining with their money, but it was all a lie. These cryptocurrency companies targeted immigrant and religious communities, promising financial freedom, but instead stole their money and drained their savings.
We see the real dangers of unregulated cryptocurrency platforms with these types of schemes, but New Yorkers can rest assured that we will use the tools at our disposal to combat crypto scammers.”
AWS Mining, which promised investors high returns from mining crypto assets, collapsed in 2019 after failing to earn enough funds to pay out customers, while NovaTech, which made weekly payments to cover its tracks, collapsed in 2023. As a result, users were unable to withdraw their funds. .
According to a press release, James' lawsuit seeks to bar both the firms and their founders from engaging in any securities or commodities business in New York, as well as to recover money and damages.
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