New York Attorney General Sues Two Crypto Companies Over Alleged $1,000,000,000 Pyramid Scheme

New York's attorney general is suing two crypto companies for their alleged roles in a billion-dollar pyramid scheme.

In a new press release, New York AG Letitia James announces a lawsuit against crypto exchange NovaTech and crypto mining company AWS Mining for allegedly defrauding hundreds of thousands of customers, including 11,000 New Yorkers.

According to the lawsuit, between 2019 and 2023, the companies allegedly used prayer groups, social media platforms and WhatsApp chats to promise high returns on investments.

However, an investigation revealed that of the $1 billion raised, only $26 million was used to trade digital assets through NovaTech's crypto exchange.

As James stated,

“Thousands of New Yorkers were falsely promised a better life if they would just trust NovaTech and AWS Mining with their money, but it was all a lie. These cryptocurrency companies targeted immigrant and religious communities by promising them financial freedom, but instead stole their money and drained their savings.

We see the real dangers of unregulated cryptocurrency platforms with projects like these, but New Yorkers can rest assured that we will use the tools at our disposal to crack down on crypto fraudsters.

AWS Mining – which promised investors high returns by mining crypto assets – collapsed in 2019 after failing to earn enough funds to repay its customers, while NovaTech, which made weekly payments to cover its tracks, s 'collapsed in 2023, leaving users unable to withdraw their funds. .

James' lawsuit seeks to enjoin the two companies and their founders from engaging in any securities or commodities-related activity in New York, as well as restitution and damages, according to the press release .

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