New York authorities have intensified legal enforcement against Cynthia Petion and Eddy Petion, the founders of cryptocurrency investment platform NovaTech, with the state Attorney General seeking nearly ₹12,000 crore in financial recoveries over an alleged multi-year fraudulent operation. According to court filings submitted by prosecutors, investors deposited cryptocurrency valued at more than ₹10,000 crore into NovaTech-associated wallets between August 2019 and May 2023. Investigators found that at least ₹1,100 crore of these pooled funds was diverted into private crypto wallets held directly by the founders, with records identifying Cynthia Petion as the authorizing party for the transfers.
Financial Recovery Demands and Questionable Trading Operations
The total amount pursued by the New York Attorney General includes roughly ₹9,900 crore in disgorgement to forfeit ill-gotten gains alongside around ₹2,000 crore in prejudgment interest. Prosecutors maintain that the venture had little connection to genuine market success, pointing to official trading records involving brokerage counterparties. Documents show that NovaTech deposited approximately ₹228 crore with trading platform service provider B2Broker between August 2019 and April 2023, losing around ₹160 crore of that capital. The wide divergence between massive market losses and the high returns presented to participants forms a primary pillar of the prosecution’s case, as investigators demonstrate that the enterprise lacked legitimate commercial profits to sustain operations.
Structure of the Alleged Pyramid Scheme and Targeted Communities
State prosecutors contend that NovaTech functioned as a classic pyramid operation, using deposits from incoming investors to finance fake trading profits and recruitment commissions for earlier participants. The New York Attorney General first instituted formal legal action against NovaTech and associated cryptocurrency mining entity AWS Mining in June 2024, charging both enterprises with operating illegal investment scams. Attorney General Letitia James stated that the ventures preyed heavily on immigrant and religious groups, soliciting thousands of prospective investors with assurances of financial independence while placing their life savings at extreme risk. Authorities emphasize that the system required constant participant recruitment and sustained capital inflows to avoid total collapse.
Default Judgments, Promoter Penalties and Investor Restitution
Enforcement efforts against the executive leadership reached a key turning point in August 2025, when a court entered a default judgment against Cynthia and Eddy Petion after both failed to answer the lawsuit, following which the couple left the United States. In parallel enforcement actions, four prominent promoters linked to the scheme consented to pay nearly ₹52 crore in victim-directed disgorgement and accepted permanent bans prohibiting them from operating in the cryptocurrency, commodities, and securities industries. State regulators emphasize that the demand for nearly ₹12,000 crore represents an ongoing recovery process rather than realized funds, noting that final restitution will depend on asset seizures and continued legal execution against the founders.
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