Writer: Jonathan Stempel
NEW YORK (Reuters) – The U.S. Securities and Alternate Fee on Monday sued cryptocurrency firm NovaTech and its husband and spouse co-founders, saying they fraudulently obtained greater than $650 million from greater than 200,000 traders worldwide, together with many Haitian-Individuals .
NovaTech and co-founders Cynthia and Eddy Petion reportedly promised traders that their cash can be protected, with Cynthia Petion assuring that they might be “worthwhile from day one.”
The SEC stated the Petions as a substitute used the brand new cash primarily to repay earlier traders and pay kickbacks to promoters whereas siphoning off thousands and thousands of {dollars} for themselves. It stated the scheme lasted 4 years till NovaTech collapsed in Might 2023.
Monday's lawsuit in federal courtroom in Miami got here two months after New York Lawyer Common Letitia James sued NovaTech and Petions in state courtroom in Manhattan, estimating their fraud at greater than $1 billion.
Regulators stated NovaTech tried to attraction to victims' non secular beliefs by way of social media, Telegram and WhatsApp, and typically within the Haitian Creole language, with Cynthia Petion figuring out herself because the “honorable CEO” and saying NovaTech was “a imaginative and prescient from God.”
Legal professionals for NovaTech and Petions, who’re believed to reside in Panama, couldn’t be instantly recognized.
Each regulators described the fraud as a pyramid scheme, the place firms pay bonuses or commissions for recruiting new traders.
The SEC additionally charged six of NovaTech's promoters with fraud, saying they continued to recruit traders regardless of “crimson flags” comparable to delayed withdrawals and US and Canadian regulatory motion, elevating questions on NovaTech's legitimacy.
One promoter, Martin Zizi, agreed to pay a civil penalty of $100,000. His lawyer didn’t instantly reply to a request for remark.
Each lawsuits search compensation for the victims and civil penalties.
The case is SEC v. Nova Tech Ltd, U.S. District Court docket, Southern District of Florida, No. 24-23058.
