NY AG Files Another Lawsuit in Cryptocurrency Crackdown, Alleging Illegal Ponzi Scheme

  • New York AG Letitia James has filed a lawsuit against cryptocurrency companies Nova Tech, Ltd and AWS Mining Pty Ltd., along with their founders and promoters, alleging that the companies operated illegal pyramid and Ponzi schemes that defrauded investors of over a billion dollars in cryptocurrency in violation of the Martin Act and New York Executive Law.
  • According to the complaint, Nova Tech and AWS Mining allegedly operated illegal pyramid and Ponzi schemes that targeted immigrant communities with false promises of high returns on their cryptocurrency investments, but in reality the companies allegedly operated as Ponzi schemes, paying investors with funds from newer investors while falsely claiming profits from cryptocurrency trading. Additionally, the AG alleges the companies illegally offered and sold securities without registering under state law.
  • The lawsuit seeks injunctive relief, as well restitution, disgorgement, civil damages, costs and fees, among other relief.
  • This action is the latest in AG James’ ongoing efforts to protect investors and regulate the cryptocurrency industry. Other recent enforcement actions include a $2 billion settlement with cryptocurrency firm Genesis Global Capital, LLC, and related entities; a $22 million settlement with KuCoin; and a $4.3 million settlement with Coin Cafe, Inc.