On June 6th, the office of the Attorney General of New York, Letitia James, announced the indictment of the cryptocurrency trading company NovaTechFx (NovaTech) and its founder, as well as the cryptocurrency mining company AWS Mining Pty Ltd. (AWS Mining), accusing them of running illegal pyramid schemes to defraud hundreds of thousands of investors, including over 11,000 New Yorkers, totaling more than $1 billion.
In a statement, Letitia James said that these companies targeted immigrant communities, especially the Haitian community in New York, using social media and WhatsApp to promote their fraudulent schemes promising high returns that were never materialized. The Attorney General’s office is seeking to prohibit these companies and their founders from operating in New York and is looking to recover illegal gains and compensate for damages.
According to the investigation by the Attorney General’s office of New York, from 2019 to 2023, investors deposited over $1 billion in cryptocurrencies with NovaTech, yet the trading volume on the NovaTech platform was less than $26 million. This indicates that a significant portion of the investments did not involve actual cryptocurrency trading.
The investigation revealed that AWS Mining claimed to generate high returns for investors through cryptocurrency mining, promising monthly returns of 15% to 20% and a 200% return on investment within 15 months. However, the company failed to generate enough returns to pay the promised monthly profits and recruitment bonuses, ultimately collapsing in 2019, causing millions of dollars in losses to investors.
After the closure of AWS Mining, its founder established NovaTech and continued to defraud new investors, targeting minority communities, particularly the Haitian community in New York, by placing enticing advertisements in chat groups such as WhatsApp to carry out their fraudulent activities.
Letitia James aims to prevent these companies and individuals from engaging in securities or commodity-related businesses in the future, and to recover the illegal profits and compensate investors for their losses.