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New York asks a court to make NovaTech's fugitive founders pay $1.37 billion over a crypto Ponzi scheme
Summary
New York Attorney General Letitia James asked a court on Thursday, Oct. 22, to order NovaTech founders Cynthia and Eddy Petion and related companies to pay about $1.37 billion, The Block and Cointelegraph reported.
The total is about $1.13 billion in disgorgement plus $232.5 million in prejudgment interest, and follows an August 2025 default judgment after the couple failed to respond to the lawsuit; The Block said the AG's office says the Petions have since fled the country.
According to the filing, investors deposited about $1.16 billion in crypto into NovaTech between August 2019 and May 2023, but only about $26 million went to trading provider B2Broker, and at least $134.5 million in withdrawals went to wallets belonging to the founders, both outlets reported.
Four promoters who recruited investors agreed to pay nearly $6 million for victims, and The Block said they are permanently barred from the securities, commodities and crypto industries.
Updates
- Update, : Oct. 23: Decrypt also reported the attorney general's request for about $1.37 billion from NovaTech's founders, who fled the country, and the nearly $6 million settlement with four top promoters.
- Update, : Oct. 23: Bitcoin Magazine also reported the $1.37 billion judgment request, describing two successive frauds that took investors for more than $1.1 billion.
Key facts
- Prosecutors said NovaTech paid purported trading profits and recruitment bonuses with money from new investors, and traders lost $18.19 million of the $25.99 million deposited with B2Broker, per the filing.
- The AG's office said more than 11,000 New Yorkers lost tens of millions of dollars through NovaTech and the earlier AWS Mining scheme, with promoters targeting Haitian and other immigrant communities through prayer groups, social media and WhatsApp.
- The motion separately seeks about $6.15 million, including interest, over AWS Mining, which collapsed in 2019; NovaTech collapsed in 2023.
- James sued NovaTech, AWS Mining and associated companies in June 2024, alleging both ran illegal pyramid schemes.