Crypto:
30336
Bitcoin:
$65.051
% 0.27
BTC Dominance:
%54.2
% 0.09
Market Cap:
$2.37 T
% 0.16
Fear & Greed:
60 / 100
Bitcoin:
$ 65.051
BTC Dominance:
% 54.2
Market Cap:
$2.37 T

New York Attorney General Sues Promoters of Two Crypto Schemes Over $1 Billion in Alleged Losses

Crypto Scams

New York Attorney General Letitia James has filed a lawsuit against two companies and their promoters that allegedly defrauded investors of more than $1 billion.

The New York Attorney General’s Office (NYAG) alleged that the defendants, including Cynthia Petion and her husband Eddy Petion, defrauded thousands of investors around the world, specifically at least 11,000 New Yorkers, by promoting these schemes.

The first alleged crypto mining investment scheme, AWS Mining, collapsed in April 2019 with the promise of 200% guaranteed returns. This was followed by a larger scam called NovaTech. He claimed that this platform is a crypto and currency trading platform. Investors deposited more than $1 billion in cryptocurrency into NovaTech from August 2019 to April 2023, but only $26 million was traded on the platform, according to the filing.

James described both schemes as pyramid schemes; In these schemes, promoters who invested in the platforms earned cryptocurrency by encouraging others to do the same. NovaTech has also been described as a Ponzi scheme in which investors are promised profits from cryptocurrency trading but are paid out of other investors’ cryptocurrency holdings.

The complaint alleged that the defendants carried out these schemes by running an affiliation scam targeting investors of Haitian descent. The schemes were introduced to investors in Creole and used their religious beliefs to trap these people, targeting those with the least financial means by promising financial freedom.

In June 2022, the defendants allegedly secretly sold their home in Florida and fled to Panama, transferring tens of millions of dollars worth of cryptocurrency from NovaTech. The scheme soon began to unravel.

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Three British Citizens Charged with $2 Million Evolved Apes NFT Rugpull

The same day, the US Department of Justice announced that three British citizens were facing wire fraud and money laundering charges.

Damian Williams, U.S. Attorney for the Southern District of New York, and James Smith, Assistant Director of the New York Federal Bureau of Investigation (FBI) New York Field Office, announced the indictment against Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan.

The charges relate to a scheme intended to defraud victims into purchasing NFTs from the Ethereum-based collectible Evolved Apes. Rugpull in 2021 has been described as a fraud scheme in which developers collect funds from buyers by promoting a digital project, then pocket the funds by abandoning the project.

“The defendants committed a fraud to raise the price of digital artworks with the promise of developing a video game,” U.S. Attorney Williams said in a statement. “They took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but the old rules still apply: it’s illegal to solicit money with false promises. NFT fraud is not a game and those responsible will be held accountable.”

“Abandoning customers without delivering on promises not only reflects poor business ethics, but also violates the trust buyers place in sellers when purchasing an item from a store or stored on the blockchain,” said FBI Assistant Director Smith. “The FBI will continue to pursue those who commit fraud for the purpose of making a quick profit.”

These charges carry a maximum sentence of 20 years in prison.

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