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New York Attorney General Sues Cryptocurrency Companies for $1 Billion Fraud
The Attorney General of the State of New York has filed a lawsuit against two cryptocurrency trading companies, NovaTechFx and AWS Mining Pty Ltd., for allegedly defrauding investors of over $1 billion. The companies are accused of running a pyramid scheme that targeted immigrant communities, particularly Haitians, through social media and community WhatsApp group chats with fraudulent promises of high returns on investments. The lawsuit seeks to ban the companies and their founders from doing business in New York and to secure disgorgement and damages.
According to the investigation, the companies promised investors high returns on investments and bonuses for recruiting new investors, but did not generate enough revenue to pay back its investors and eventually collapsed in 2019, causing millions of dollars in losses. The companies also misrepresented themselves and advertised high profits from trading, but only a small fraction of the total deposits were actually traded on the platform.
The Attorney General is seeking to permanently prohibit the accused from engaging in the trade of cryptocurrencies or participating in any multi-level marketing or pyramid schemes, and to direct the defendants to produce all accounts of their company and reimburse the plaintiffs for their losses.
This lawsuit is part of the Attorney General's efforts to crack down on cryptocurrency fraud, as there have been multiple cryptocurrency-related scams in recent years. This comes in light of the United States Congress passing a heavily contested bill that was criticized for watering down investor protections.
