SEC Cracks Down on NovaTech in $650 Million Crypto Fraud Case

NovaTech Leaders Accused of Running a Global Crypto Scam 

The SEC has charged Cynthia and Eddy Petion, the masterminds behind NovaTech, along with their top promoters. According to the SEC, these individuals operated a multi-level marketing (MLM) scam disguised as a crypto and foreign exchange investment program from 2019 to 2023. The scheme promised high returns to lure in unsuspecting investors. 

False Promises and Personal Gains 

Cynthia Petion allegedly assured investors that their money was safe and that they would start profiting immediately. However, the SEC argues that these promises were false. Instead of generating profits, the Petions allegedly used most of the funds to pay earlier investors and promoters. The complaint also alleges that they siphoned off millions for personal use, leading to significant losses when the scheme collapsed. 

Legal Actions and Settlements 

The SEC has filed its complaint in the U.S. District Court for the Southern District of Florida. The charges against NovaTech, the Petions, and their promoters include violations of federal securities laws.  

One of NovaTech’s promoters, Martin Zizi, has already reached a partial settlement with the SEC. The agreement, which is pending court approval, includes a $100,000 civil penalty and a permanent ban on future violations. 

A History of Fraud 

This is not the first time the Petions have faced legal action. In June, New York Attorney General Letitia James filed a lawsuit against them for their involvement in a previous pyramid scheme, AWS Mining. The scheme, which ran from 2017 to 2019, promised investors a 200% return from crypto mining within 13 to 15 months.  

The Petions were top promoters of AWS Mining and founded NovaTechFX. After the collapse of the earlier scheme, they promoted it as a new crypto and forex trading platform with promises of up to 4% weekly returns. 

Ongoing Legal Battles 

In addition to the SEC’s actions, Multi State Law Firm of Morris Legal filed a class-action lawsuit against NovaTech and its leaders in February. Judge Vernon S. Broderick, a former federal prosecutor with expertise in complex fraud cases is overseeing the case. 

The SEC’s crackdown on NovaTech marks a significant step in holding those responsible for crypto fraud accountable. The outcome of these legal battles will likely have far-reaching consequences for the future of crypto regulation.