With the advent of cryptocurrencies in the past decade, mining has emerged as a stable source of income for crypto miners across the world.
However, one thing that is fairly prevalent in the world of crypto is scams. The prospect of meteoric rise in the crypto world has led to such unfortunate scams where people fall prey to dubious, lucrative offers made by nefarious elements.
The obvious scambaits include prospects of buying digital assets with the intention of reselling them for a profit, turning to the myriad of gambling platforms available at overseas websites that accept crypto, mining tokens, and much more.
Because of this interest in making money from crypto, many criminals target would-be investors, especially the less-informed ones.
A recent notable case comes from New York, where Attorney General Letitia James has filed a lawsuit against two crypto-related companies- AWS Mining and NovaTechFX- for collectively duping customers of over $1 billion.
What is the AWS Mining and NovaTechFX legal case?
The two companies at the center of this case are AWS Mining and NovaTechFX. The former is Australia-based and operated from 2017 to 2019 as a crypto mining firm. Because crypto mining is often taxing and expensive to do, many people, especially the less tech-savvy, turn to mining companies to do the heavy lifting for them. And this is what AWS Mining claimed it would do for its customers.
According to official documents, AWS promised a 200% return on investment from its customers but ended up being a ponzi scheme. Two people who did profit from it were Cynthia and Eddy Petion, a couple based in Panama. As two of the company’s biggest promoters, they were given a 10% commission for every customer they brought in. The couple allegedly brought in about 200,000 people during their time working with AWS Mining and were even given the title of president.
In April 2019, the company went under and the Petions decided to start their own fraudulent venture. This new company was called NovaTechFX and saw both Eddy and Cynthia in leadership roles. It was a crypto and forex trading firm and just like AWS, NovaTechFX promised a guaranteed return on investment, up to 4% per week. They also followed the model set down by AWS by having promoters, three of which were listed as Martin Zizi, James Corbett, and Frantz Ciceron, for whom they paid a commission.
NovaTechFX proved to be very successful, with $1 billion in total deposited on it between 2019 and 2023. In the wake of the FTX collapse in 2022, investors began requesting their money back. The exchange, however, halted withdrawals by early 2023 and soon shut down.
Around the same time, they had also gotten a cease-and-desist order from state regulators and it seemed an investigation was in the works. But, knowing that the whole operation had been a scam, the Petions sold their home in Florida and fled to Panama.
Cynthia allegedly told one of her promoters to flee as well, saying “They can’t serve you if they can’t find you lol.”
While crypto scams of all kinds target a myriad of consumers, such as those who invest in presales, play at anonymous casino sites, and more, NovaTechFX was especially nefarious because it targeted Haitian immigrants who were connected through church communities.
In total, it is estimated that about 11,000 New Yorkers, mostly Haitian immigrants, were affected. Court documents show that outside of the church and prayer sessions, they were targeted through social media platforms and messaging apps like WhatsApp.
A class action lawsuit was filed against both NovaTech and Cynthia Petion earlier this year and now, the New York Attorney General has sued the company for violating the Martin Act, which is New York’s anti-fraud law.
“These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings,” a statement from New York Attorney General Letitia James said.
Conclusion
The case is far from over as the Petions have fled the country and many of their associates are still at large. Like many of the crypto fraud cases before it, it could take years to resolve and there is no guarantee that victims will get their money back.
Scams have always targeted vulnerable populations like immigrants who have limited knowledge of certain investment vehicles. In the case of NovaTech, there was also the religious element that was used to gain investors’ trust. Sadly, it joins the long list of crypto scams that paint the industry in a bad light.
