New York AG Seeks $1.37 Billion From NovaTech Founders

New York Attorney General Letitia James asked a court on Thursday to order Cynthia and Eddy Petion, founders of defunct crypto and forex trading platform NovaTech, to pay $1.37 billion over an alleged Ponzi scheme, according to a court filing.

The request follows an August 2025 default judgment that found the Petions and related companies liable after they failed to respond to James’s June 2024 lawsuit. The motion seeks the return of about $1.13 billion in investor funds plus $232.5 million in interest.

It separately seeks about $6.15 million, including interest, over AWS Mining, an earlier crypto mining scheme that collapsed in 2019. NovaTech collapsed in 2023, leaving tens of thousands of investors unable to withdraw their funds.

What did the filing show about the money?

The motion breaks the recovery request into three components:

• About $1.13 billion in investor principal.
• $232.5 million in interest.
• About $6.15 million, including interest, over AWS Mining.

Investors deposited about $1.16 billion into NovaTech’s crypto wallets between August 2019 and May 2023. Only about $26 million was deposited with B2Broker, the platform’s trading provider, for trading. On the filing’s figures, less than 3% of collected funds reached the provider.

For traders and counterparties, that separation makes custody and fund movement more important than the balances displayed in platform wallets. A wallet entry did not establish that funds had reached the trading provider or remained available for withdrawal. The location of collected capital therefore becomes the central operational issue for market participants.

More than 11,000 New Yorkers lost tens of millions of dollars through NovaTech and AWS Mining, the AG’s office said. The complaint alleged that promoters targeted Haitian and other immigrant communities through prayer groups, social media and WhatsApp.

Those promoters promised high returns and recruitment bonuses, according to the complaint. James sued NovaTech, AWS Mining and other associated companies in June 2024. For compliance teams, the alleged use of prayer groups and messaging networks complicates monitoring because promotional claims traveled through trusted community channels.

What do the promoter settlements add?

Four people who recruited investors into NovaTech separately agreed to pay nearly $6 million in settlements intended to benefit victims, the AG’s office said. For scale, that pool represents about 0.5% of the $1.13 billion principal sought from the Petions and related companies.

The settlements create a recovery channel separate from the founders’ motion, but their practical value depends on collection and allocation. Cointelegraph asked the New York Attorney General’s Office how any recovered funds would be distributed to victims and what steps could be taken to enforce the judgment. The office had not responded by publication.

The two proceedings address different layers of the case. The default judgment concerns the founders and related entities; the settlements concern four recruiters. Neither the $1.37 billion motion nor the nearly $6 million agreement establishes that victims have already received money.

What does this change for investors?

For victims, the Thursday filing turns an existing liability finding into a defined request for principal and interest. It does not turn that request into cash in hand. The court still must rule, and the filing does not identify a collection schedule or a formula for distributing recovered funds.

Because liability entered by default after the defendants failed to respond, the judgment states the legal result without a contested merits trial. The next phase is enforcement: identifying collectible assets, pursuing payment and allocating proceeds. The AG’s office had not answered Cointelegraph’s questions on those steps by publication.

For market participants, the case raises a separate operational test: custody evidence must show more than a platform-generated wallet entry. The filing’s central contrast—$1.16 billion in wallets versus about $26 million sent to B2Broker—shows why counterparties and traders need proof of where customer funds went, not merely evidence that the platform offered trading services.

The next concrete checkpoint is a court ruling on the money-recovery motion, followed by an enforceable distribution process; by publication, no collection deadline had been disclosed, leaving $1.37 billion as the amount sought rather than a recovery guarantee.