The Attorney General of New York has filed a lawsuit against two cryptocurrency companies for their alleged involvement in a massive $1 billion pyramid scheme.

In a recent press release, New York AG Letitia James announced legal action against NovaTech, a crypto exchange, and AWS Mining, a crypto mining company, for reportedly deceiving hundreds of thousands of customers, including 11,000 individuals from New York.

The lawsuit claims that from 2019 to 2023, the companies utilized prayer groups, social media platforms, and WhatsApp chats to lure investors with promises of high returns on their investments.

However, an investigation revealed that out of the $1 billion raised, only $26 million was actually used for trading digital assets on NovaTech’s platform.

According to James, “Thousands of New Yorkers were misled into believing that NovaTech and AWS Mining would provide them with a better future if they invested with them. Unfortunately, it was all a scam. These companies targeted vulnerable immigrant and religious communities, promising financial freedom but ultimately stealing their hard-earned money and savings.”

AWS Mining, which offered investors returns through crypto mining, collapsed in 2019 when it could not repay its customers, while NovaTech, which tried to cover its tracks with weekly payments, went under in 2023, leaving users unable to access their funds.

The lawsuit filed by James aims to prohibit both companies and their founders from conducting any business related to securities or commodities in New York, in addition to seeking disgorgement and damages, as stated in the press release.

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