New York Cracks Down on Crypto Pyramid Schemes Targeting Immigrants

New York Attorney General Letitia James has sued Novatechfx, AWS Mining, and their founders for orchestrating crypto pyramid schemes that defrauded over 11,000 New Yorkers out of more than a billion dollars in cryptocurrency. These companies targeted vulnerable immigrant communities, particularly Haitians, with false promises of high returns.

NYAG Letitia James Takes Action Against Crypto Pyramid Schemes

New York Attorney General Letitia James has filed a lawsuit against Novatechfx (Novatech), AWS Mining Pty Ltd., and their founders, accusing them of operating illegal pyramid schemes that defrauded investors, including over 11,000 New Yorkers, of more than a billion dollars in cryptocurrency.

The companies allegedly targeted vulnerable immigrant communities, particularly Haitian New Yorkers, leveraging social media and community networks with false promises of lucrative returns on cryptocurrency investments. The lawsuit outlines that a vast amount of the money invested in Novatech was never actually employed in legitimate trading activities on their platform.

“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,” said Attorney General James. “These cryptocurrency companies targeted immigrant and religious communities with promises of financial freedom but instead stole their money and drained their life savings.” She stressed:

We are seeing the real dangers of unregulated cryptocurrency platforms with schemes like these.

The legal pursuit by Attorney General James seeks to enforce significant penalties against the entities and their founders, aiming to ban their operations in New York and secure financial restitution for the victims. The lawsuit explains that after the collapse of AWS Mining in 2019, the founders initiated Novatech, which continued the pattern of deception, emphasizing high returns and recruitment bonuses to lure investors. They misrepresented the company’s legal and operational status, falsely claiming it was a registered hedge fund broker and misleading investors about their trading capabilities and licensing.

Commenting on James’ action, Assemblymember Clyde Vanel opined:

While cryptocurrency and blockchain technology have the potential to improve financial inclusion and close the wealth gap, the tragic reality is that bad actors continue to misuse these systems for personal gain, at the expense of the public.