New York’s attorney general is suing two crypto companies for their alleged role in a $1 billion 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, the companies allegedly used prayer groups, social media platforms and WhatsApp chats to promise high returns on investments between 2019 and 2023.
However, research revealed that of the $1 billion they collected, only $26 million was used to trade digital assets through NovaTech’s crypto exchange.
As James says,
“Thousands of New Yorkers were wrongly 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 depleted their savings.
We see the real dangers of unregulated cryptocurrency platforms with these types of schemes, but New Yorkers can rest assured that we will use the tools at our disposal to take on crypto fraudsters.”
AWS Mining – which promised investors high returns by mining crypto assets – fell apart in 2019 after failing to make enough money to pay back customers, while NovaTech, which made weekly payments to cover its tracks, collapsed in 2023, leaving users unable to withdraw their funds. .
James’ lawsuit seeks to ban both companies and their founders from engaging in securities or commodity-related matters in New York, as well as relegation and damages, the press release said.
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