According to a press release from the New York Attorney General’s Office (NYAG), NovaTech and AWS Mining defrauded more than 11,000 New Yorkers through an illegal “pyramid scheme” from 2019 to 2023. The complaint states that investors lost over 1 billion dollars as a result of this fraud.

According to NYAG’s statement, NovaTech and AWS Mining targeted immigrant communities, particularly Haitian New Yorkers. Companies used communication tools such as prayer groups, social media platforms and WhatsApp to lure investors with the promise of high returns. This has left immigrant communities more vulnerable due to a lack of financial literacy and a relatively new interest in cryptocurrency markets.

As part of the investigation, NYAG revealed that investors deposited over $1 billion in cryptocurrency into NovaTech from 2019 to 2023. But the shocking truth was that only $26 million of this amount was actually traded. It remains unclear where the remaining funds go. The complaint also states that AWS Mining claimed to achieve high returns through cryptocurrency mining, but could not fulfill these promises and collapsed in 2019.

After the collapse of AWS Mining, the Petion couple allegedly founded NovaTech. NovaTech continued to lure investors with the promise of high returns by marketing itself as a registered hedge fund broker. However, NYAG claims that NovaTech does not actually have the necessary license to trade cryptocurrencies in the United States and is deceiving investors with misleading information. The complaint alleges that NovaTech’s weekly profits are completely fabricated and that the payments are actually covered by the investments of other investors. This is one of the typical features of a classic “Ponzi scheme”.

With the collapse of NovaTech in May 2023, tens of thousands of investors became unable to access their cryptocurrencies. This caused investors to lose over 1 billion dollars in total. New York Attorney General James took action to hold the people behind this fraud accountable. The lawsuit demands that AWS Mining, NovaTech and the Petion couple be banned from doing business in New York, repayment of ill-gotten gains and compensation.

This case highlights how vulnerable immigrant communities can be to cryptocurrency fraud. NYAG emphasizes that immigrant communities need greater protection against such scams due to their lack of full integration into the financial system and lack of knowledge about cryptocurrencies. This case also highlights the lack of regulation in cryptocurrency markets