Wu said that he learned that the U.S. Securities and Exchange Commission (SEC) accused NovaTech and its initiators Cynthia and Eddy Petion of implementing a cryptocurrency fraud scheme worth more than $650 million. According to the allegations, the Petions operated NovaTech as a multi-level marketing (MLM) and crypto asset investment project from 2019 to 2023, and claimed that NovaTech would invest investors' funds in crypto assets and foreign exchange markets, and make profits on the first day. In fact, most of the investor funds were used to pay existing investors and pay commissions to promoters, and only a small part of the investor funds were used for trading. Earlier in June, New York Attorney General Letitia James had filed a lawsuit against NovaTech and mining company AWS Mining, accusing the two companies of engaging in illegal pyramid schemes involving cryptocurrencies worth more than $1 billion, and the initiators were Cynthia and Eddy Petion and others.
