New York AG seeks $1.37 billion from NovaTech founders Over Ponzi scheme

Why This Matters

• The case represents one of the largest cryptocurrency-related fraud actions brought by a state attorney general, with over 11,000 New York victims.
• The outcome could set a precedent for how state authorities pursue restitution from crypto Ponzi schemes, especially those targeting immigrant communities.
• The $1.37 billion judgment, if enforced, would provide some recovery for victims, but enforcement across borders and against individual defendants remains challenging.

Background

NovaTech presented itself as a crypto and forex trading platform. The attorney general alleged it was a Ponzi scheme where new investor deposits were used to pay earlier investors. The founders had previously been involved in AWS Mining, which collapsed in 2019. The scheme specifically targeted Haitian-American and other immigrant communities through trusted networks like prayer groups. A default judgment was entered in August 2025 after the Petions failed to respond to the lawsuit.

Key Perspectives

New York Attorney General Letitia James: Seeking full restitution for victims and highlighting the harm to immigrant communities. The settlements with promoters show a strategy of pursuing all levels of the scheme. Defendants (Cynthia and Eddy Petion): They defaulted on the lawsuit, so their position is not on record. They may contest the judgment or seek to avoid enforcement. Critics/Skeptics: Some may question whether the full $1.37 billion can be recovered, particularly if assets have been dissipated or moved offshore. Others may argue that the case underscores the need for stronger federal crypto regulation.

What to Watch

• The court's ruling on the motion for the $1.37 billion judgment.
• Enforcement actions to locate and seize assets, possibly involving international cooperation.
• Potential criminal charges against the Petions or other promoters.
• How any recovered funds are distributed to victims (process yet to be detailed).