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New York Attorney General Sues Two Crypto Firms Over Alleged $1,000,000,000 Pyramid Scheme
New York’s attorney general is suing two cryptocurrency companies for their alleged roles in a $1 billion pyramid scheme.
In a new one Press releaseNew York AG Letitia James announces legal action against cryptocurrency exchange NovaTech and cryptocurrency mining firm AWS Mining for allegedly defrauding hundreds of thousands of customers, 11,000 of whom were New Yorkers.
According to the indictment, between 2019 and 2023 the companies used prayer groups, social media platforms and WhatsApp chats to promise high investment returns.
However, an investigation found that of the $1 billion raised, only $26 million was used to trade digital assets on NovaTech’s cryptocurrency exchange.
As stated by James,
“Thousands of New Yorkers were falsely promised a better life 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.
We are seeing the real dangers of unregulated cryptocurrency platforms with schemes like these, but New Yorkers can rest assured that we will use the tools at our disposal to crack down on cryptocurrency scammers.”
AWS Mining, which promised investors high returns by mining crypto assets, collapsed in 2019 after failing to earn enough funds to repay customers, while NovaTech, which made weekly payments to cover its tracks, collapsed in 2023, leaving investors users unable to withdraw their funds. .
According to the press release, James’ lawsuit seeks to prohibit both the company and its founders from engaging in any securities or commodities-related activity in New York, as well as disgorgement and damages.
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