After reports of another crypto fraud, the US SEC has filed a lawsuit against a crypto company called NovaTech and its co-founder couple. According to the SEC( US Security and Exchange Commission), the founding couple raised over $650 million from around 200,000 investors worldwide, including many Haitian-Americans.
The SEC mentioned that the co-founders Cynthia and Eddy Petion had promised their investors that their money would be safe. Cynthia even promised that the investors would be “in profit from day one.” As per the SEC, the Petions used this money to settle their older accounts with their customers and to pay commissions to their promoters while siphoning millions of dollars for themselves. This scheme lasted for about 4 years and was only brought to light after the sudden collapse of the NovaTech company in May 2023.
Now, the SEC has registered a lawsuit against the crypto firm in the Miami Federal court. This came 2 months after New York Attorney General Letitia James sued Petions and NovaTech in state court in Manhattan and alleged that the couple had committed fraud amounting to some $1 billion.
The regulators have also alleged that the company used and exploited the religious beliefs of many people. The couple tried to appeal to the victim’s religious values through many social media platforms and in various languages, including the Haitian Creole language. Moreover, Cynthia also branded herself as a “reverend CEO” and said that NovaTech was “God’s Vision.” The regulators have mentioned that the company worked in a pyramid scheme structure where investors were paid bonuses and commissions to recruit new investors.
The SEC has also charged 6 promoters of the company, saying that the promoters kept on bringing new investors to the company even after some “Red Flags” like delayed transactions. However, it was reported that one of the promoters has agreed to pay a $100,000 civil fine. The whole investigation is still underway.