New York Attorney General Letitia James has filed a lawsuit against two cryptocurrency companies, NovaTech and AWS Mining, for allegedly defrauding hundreds of thousands of customers, including 11,000 New Yorkers.
Pyramid Scheme Allegations
The lawsuit alleges that from 2019 to 2023, the companies used various platforms, including prayer groups and social media, to lure investors with promises of high returns on their investments. However, an investigation revealed that only a small portion of the $1 billion collected was actually used for trading digital assets.
Collapse of AWS Mining and NovaTech
AWS Mining, which promised high returns through crypto mining, collapsed in 2019 due to insufficient funds to repay customers. NovaTech, which made weekly payments to cover its tracks, eventually collapsed in 2023, leaving users unable to withdraw their funds.
Legal Action
James’ lawsuit seeks to ban both companies and their founders from engaging in any business related to securities or commodities in New York. It also seeks disgorgement and damages.
Statement from Attorney General James
“Thousands of New Yorkers were falsely promised better lives if they simply trusted NovaTech and AWS Mining with their money, but it was all a lie,” James said. “We will use the tools at our disposal to crack down on crypto fraudsters.”
