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

The Attorney General of New York is suing two crypto firms 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, 11,000 of which were New Yorkers.

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

However, an investigation found that out of the $1 billion they collected, only $26 million was being used to trade digital assets over NovaTech’s crypto exchange.

As stated by James,

“Thousands of New Yorkers were falsely promised better lives 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 drained their life savings.

We are seeing the real dangers of unregulated cryptocurrency platforms with schemes 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 – fell apart in 2019 after failing to earn enough funds to repay customers while NovaTech, which made up weekly payments to cover its tracks, collapsed in 2023, leaving users unable to withdraw their funds.

James’ lawsuit seeks to ban both firms and its founders from engaging in any business related to securities or commodities in New York as well as disgorgement and damages, according to the press release.

Generated Image: Midjourney