New York's attorney general is demanding nearly $1.37 billion from the husband-and-wife team behind NovaTech, the crypto scheme that swallowed more than $1.16 billion of investor deposits. The catch: founders Cynthia and Eddy Petion have fled the country — making collection an open question.
Key points:
- NY Attorney General Letitia James is seeking $1.13 billion in disgorgement plus $232.5 million in prejudgment interest from the NovaTech founders.
- Records show $1.16 billion in crypto deposits flowed into NovaTech wallets from 2019 to 2023, but only about $26 million ever reached a trading platform.
- The couple ignored the lawsuit, lost by default judgment in August 2025, and have since fled the US; four promoters already agreed to pay nearly $6 million.
According to the court filing, payment-processor records show investors deposited $1.16 billion worth of cryptocurrency into NovaTech's wallets between August 2019 and May 2023. At least $134.5 million was later withdrawn to wallets belonging to the founders, with Cynthia Petion personally authorizing the transfers.
And here is the damning part: while investors were told their money was being traded, NovaTech deposited only $25.99 million with the trading platform B2Broker — and traders lost $18.19 million of even that amount. Prosecutors say the "profits" paid to investors and the recruitment bonuses were simply funded with deposits from newer investors — the classic pyramid structure.
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Will victims ever see their money again?
That is the hard question. The case began in June 2024, when James sued NovaTech and crypto mining company AWS Mining over what she called illegal pyramid schemes. "NovaTech and AWS Mining scammed thousands of vulnerable New Yorkers by telling them they were making a safe investment when in reality, they were victims of a pyramid scheme," she said, adding that the scammers targeted immigrant and religious communities and robbed people of their life savings.
With the founders now abroad and the money scattered, recovery looks tough. Separately, four NovaTech promoters have already agreed to pay nearly $6 million in disgorgement for victims and are permanently barred from the securities, commodities and cryptocurrency industries. For traders, the lesson is an old one: when promised "safe" returns, the trading story underneath is often fiction.
Read also: What Is a Crypto Wallet? Hot Wallet vs Cold Wallet Explained
— Crypto News Daily News Desk
This post is news only, not financial advice. Always do your own research before buying or selling crypto.
Sources: The Block
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