New York’s Attorney General has filed a lawsuit against two cryptocurrency companies, accusing them of being involved in a $1 billion pyramid scheme.
In a recent announcement, Letitia James revealed that NovaTech, a crypto exchange, and AWS Mining, a crypto mining company, are being sued for allegedly deceiving hundreds of thousands of customers, including 11,000 individuals from New York.
The lawsuit claims that from 2019 to 2023, the companies utilized prayer groups, social media platforms, and WhatsApp chats to entice customers with promises of high investment returns.
However, an investigation discovered that out of the $1 billion collected, only $26 million was actually used for trading digital assets on NovaTech’s platform.
James stated, “Numerous New Yorkers were led to believe that they would have a better life if they trusted NovaTech and AWS Mining with their money, but it was all a scam. These cryptocurrency companies targeted immigrant and religious communities, offering financial freedom but ultimately stealing their funds and draining their savings.
This case highlights the risks associated with unregulated cryptocurrency platforms, but New Yorkers can be assured that we will take action against crypto scammers using all available resources.”
AWS Mining, which promised investors high returns through crypto mining, collapsed in 2019 when it failed to generate enough funds to repay customers. NovaTech, on the other hand, ceased operations in 2023, leaving users unable to access their funds.
The lawsuit filed by James aims to prohibit both companies and their founders from conducting any business related to securities or commodities in New York. It also seeks disgorgement and damages, as outlined in the press release.
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