NovaTech Crypto Scam Explained: New York Seeks $1.37 Billion From Founders — Will Victims Get Paid?

New York Just Put a $1.37 Billion Price Tag on the NovaTech Crypto Scam

On Thursday, October 22, 2026, New York Attorney General Letitia James asked a court to order NovaTech's founders, Cynthia and Eddy Petion, and their related companies to pay a staggering $1.37 billion over what prosecutors describe as one of the largest cryptocurrency Ponzi schemes in recent history. The filing — which seeks $1.13 billion in disgorgement of stolen investor funds plus $232.5 million in prejudgment interest — is the latest chapter in a case that has been building since James sued NovaTech in June 2024.

For the tens of thousands of people who put money into NovaTech between 2019 and 2023 and never got it back, the question that matters is simple: does this judgment mean they'll actually get paid? The honest answer is complicated — and it reveals how these mega-schemes really work, where the money actually went, and why victims so often recover only pennies on the dollar.

Here is what the attorney general's new filing says, how the NovaTech machine operated for four years, what happened to the $1.16 billion investors deposited, and what anyone in crypto should learn from the wreckage.

What the Attorney General's New Filing Actually Says

The core numbers in the October 22 filing are worth reading carefully, because they tell the whole story of the fraud in a handful of figures:

• Total sought: $1.37 billion — broken down as $1.13 billion in disgorgement (returning investors' stolen funds) plus $232.5 million in prejudgment interest, according to Cointelegraph's reporting on the filing.
• $1.16 billion in crypto deposits: CoinPayments records show investors deposited roughly $1.16 billion worth of cryptocurrency into NovaTech-controlled wallets between August 2019 and May 2023.
• $26 million actually traded: Of that $1.16 billion, only about $25.99 million ever reached NovaTech's trading provider, B2Broker. The traders there went on to lose $18.19 million of it.
• $134.5 million to the founders: At least $134.5 million in withdrawals flowed to wallets belonging to Cynthia and Eddy Petion personally, with Cynthia authorizing the transfers.
• More than 11,000 New Yorkers affected, out of hundreds of thousands of investors worldwide.

Read those numbers twice. Investors handed over $1.16 billion to trade crypto. About 2.2% of it was actually placed with a trading provider. The rest — the overwhelming majority — either went to the founders' own wallets or was shuffled around to pay out earlier investors, which is the textbook definition of a Ponzi scheme.

The court already found the Petions and their companies liable by default back in August 2025, after they failed to respond to the lawsuit. Thursday's filing is the "inquest" — the proceeding where the judge determines exactly how much they owe. In a separate move, the filing also seeks about $6.15 million, including interest, over AWS Mining, the earlier crypto-mining scheme tied to the same network that collapsed in 2019.

How NovaTech's Ponzi Machine Actually Worked

NovaTech presented itself as a crypto and forex trading platform promising high, consistent returns. Investors deposited cryptocurrency — mostly Bitcoin and other major coins — and were shown account dashboards reflecting steady profits. In reality, investigators say those "profits" were simply money taken from newer investors and recycled to earlier ones, while recruitment bonuses were paid out to anyone who brought in fresh deposits.

That recycling loop is what makes a Ponzi self-sustaining for years. As long as new deposits exceed withdrawals, the dashboards keep looking healthy and the promoters keep getting paid. NovaTech ran from August 2019 until its collapse in 2023 — four years of compounding investor trust — before withdrawals stopped and the scheme fell apart, leaving tens of thousands of people locked out of their accounts.

Prosecutors allege the targeting was deliberate and cynical. The complaint says promoters went after Haitian and other immigrant communities through church prayer groups, social media, and WhatsApp communities, promising a path to financial security for families sending money home. "These scammers targeted immigrant and religious communities with the promise of a better life but instead robbed them of their life savings," James said in her statement on the new filing.

The playbook should be familiar to anyone who has followed crypto fraud cases in recent years — including the FBI's shutdown of 241 pig-butchering scam websites, which used the same trust-building techniques in different packaging. The asset class changes; the psychology doesn't.

The $26 Million That Was Supposed to Be Trading

The single most damning statistic in the filing is the $25.99 million that reached B2Broker versus the $1.16 billion investors deposited. For a company whose entire pitch was expert crypto and forex trading, the trading operation was essentially a prop — and an unprofitable one at that, since the traders lost more than two-thirds of what they were given.

This detail matters for a reason beyond the NovaTech case itself: it shows why fraud investigators follow the on-chain money rather than the marketing. CoinPayments records — not NovaTech's dashboards — revealed where the crypto actually went. Anyone can build a dashboard that shows 20% annual returns. On-chain analysis shows whether any trading ever happened, and it increasingly provides the receipts that bring these cases down.

The broader industry picture is ugly. According to the Q3 2026 industry report on crypto hacks and exploits, billions continue to be lost to fraud and theft every quarter. NovaTech-style Ponzi schemes sit alongside exchange hacks and DeFi exploits as the industry's three chronic money losers — and the Ponzi is the oldest of them all.

The Four Promoters Who Just Paid $6 Million

Thursday's filing wasn't the only action from the AG's office. In an October 22 announcement, James also secured nearly $6 million in settlements from four people who recruited investors into NovaTech and AWS Mining — Martin Zizi, Frantz Ciceron, Ricardo Roy Sr., and James Corbett. The breakdown, as reported by Basis Desk:

• Martin Zizi: $2.9 million
• Frantz Ciceron: $2.05 million
• James Corbett: $750,000
• Ricardo Roy Sr.: $275,861

The money is earmarked for victim restitution. Critically, all four promoters are now permanently barred from participating in the securities, commodities, and cryptocurrency industries — a lifetime industry ban that signals regulators are treating recruiting for these schemes as seriously as running them.

The settlements resolve claims that the promoters made deceptive representations when offering AWS Mining contracts and NovaTech trading packages, operated as unregistered brokers, and participated in an unlawful pyramid structure. For would-be crypto influencers paid to promote "guaranteed return" platforms: this is the legal exposure you are signing up for.

AWS Mining: The First Scam That Predicted the Second

The filing also reaches back to AWS Mining, the crypto-mining scheme that collapsed in 2019 — the same year NovaTech was launching. James sued both operations together in June 2024, alleging they were part of the same playbook run through overlapping networks of people.

The pattern is one of the most reliable early-warning signs in crypto fraud: operators who ran a collapsed project simply reboot under a new brand with the same team, the same promoters, and a fresh set of promises. NovaTech picked up roughly where AWS Mining left off, targeting overlapping communities through the same recruitment channels. Whenever a new "guaranteed yield" platform is promoted by the alumni of a collapsed one, the AWS Mining-to-NovaTech pipeline is exactly what is being repeated.

The Founders Fled — So Who Actually Pays $1.37 Billion?

Here is the uncomfortable part. The Petions failed to respond to the lawsuit, were found liable by default in August 2025, and have since fled the United States, according to reporting on the case. A judgment is a piece of paper; enforcing it against fugitives requires finding their assets.

Crypto actually gives prosecutors a better shot than in a classic offshore fraud, because the money trail is on-chain. Investigators have already traced $134.5 million to wallets belonging to the founders. If those funds were moved to exchanges with know-your-customer records — or remain in wallets prosecutors can identify — they can be frozen and seized. Enforcement actions can also target assets held by associates, companies in the network, and property purchased with investor money.

But the math is sobering. Even the most successful fraud recoveries return a fraction of total losses, because the money has been spent, hidden, or dissipated over years. The $6 million from the four promoters' settlements will fund real victim restitution — that part is concrete. The $1.37 billion judgment, by contrast, is mostly a legal declaration of how much the founders owe, and collecting anything close to it would require finding assets on a scale rarely seen in fraud enforcement.

Will NovaTech Victims Ever See Their Money Again?

Realistically: some victims will receive partial restitution, and almost nobody will be made whole. That is the pattern across every major Ponzi recovery — from classic Wall Street schemes to modern crypto frauds. The money prosecutors recover gets distributed through a claims process, and victims typically receive cents on the dollar because the scheme spent or dispersed most of what it took in.

What victims should do now: monitor announcements from the New York Attorney General's office about the restitution process and any claims procedure, keep records of deposits (wallet addresses, transaction hashes, amounts, dates), and be deeply skeptical of anyone who contacts them offering to "recover" their funds for a fee — recovery scams targeting fraud victims are a whole secondary industry. Protecting what you still hold matters too: the guide to storing crypto safely covers cold storage and seed-phrase basics that eliminate most of the attack surface scams exploit.

7 Red Flags the NovaTech Case Exposes

NovaTech lasted four years and took $1.16 billion. Here are the warning signs, visible in hindsight, that every crypto investor should treat as disqualifiers:

• Guaranteed or suspiciously consistent returns. Legitimate trading loses money sometimes — remember, even NovaTech's own tiny trading operation lost $18.19 million. A platform that never shows a down month is manufacturing its numbers.
• Recruitment bonuses as the business model. If the pitch spends more time on referral commissions than on the trading strategy, the "strategy" is recruiting.
• Targeting of closed, trust-based communities. Churches, diaspora groups, family WhatsApp chats — affinity fraud works because the recommendation arrives wrapped in trust.
• No verifiable trading activity. Real funds and strategies leave verifiable traces — audited statements, identifiable counterparties, on-chain footprints. A dashboard alone is a claim, not evidence.
• Founder opacity. Anonymous or unaccountable operators, offshore entities, no licenses anywhere.
• Withdrawal friction that ramps up over time. The classic end-of-Ponzi sequence: delays, new "verification" steps, fees to withdraw, then silence.
• Promoted by people with a collapsed project behind them. The AWS Mining alumni pipeline is the tell. Check who is promoting a platform, not just what the platform promises.

And when you do hold real crypto, keep it where nobody can freeze or borrow it without your keys: hardware wallets remain the gold standard for taking custody away from platforms entirely.

Frequently Asked Questions

What was NovaTech?

NovaTech was a crypto and forex trading platform that operated from August 2019 until its collapse in 2023. It promised investors high returns from professional trading, but investigators say it paid "profits" using deposits from new investors — a Ponzi scheme — and that only about $26 million of $1.16 billion in deposits was ever placed with an actual trading provider.

How much is the New York AG seeking from the NovaTech founders?

In an October 22, 2026 court filing, Attorney General Letitia James asked a court to order founders Cynthia and Eddy Petion and their related companies to pay $1.37 billion — $1.13 billion in disgorgement of investor funds plus $232.5 million in prejudgment interest.

Who were the victims of the NovaTech scam?

More than 11,000 New Yorkers and hundreds of thousands of investors worldwide. Prosecutors say promoters deliberately targeted Haitian and other immigrant communities through prayer groups, social media, and WhatsApp, promising safe, high-return investments.

Will NovaTech victims get their money back?

Partially at best. Nearly $6 million from four settling promoters will fund victim restitution, and prosecutors may seize identified founder assets. But Ponzi recoveries historically return only a fraction of losses — victims should watch the AG's office for a claims process and keep deposit records.

What happened to the NovaTech founders?

Cynthia and Eddy Petion were found liable by default in August 2025 after failing to respond to the lawsuit, and they have since fled the United States, according to reporting on the case. The new filing asks the court to fix the amount they owe at $1.37 billion.

How can I avoid crypto Ponzi schemes like NovaTech?

Reject guaranteed returns, verify real trading activity beyond a platform dashboard, be wary of recruitment-heavy pitches and closed-community targeting, check promoters' histories, and keep your crypto in self-custody with a hardware wallet rather than on platforms you can't verify.

The Bottom Line

The $1.37 billion number will dominate the headlines, but the numbers that matter most are the quiet ones: $1.16 billion in, $26 million actually traded, $134.5 million to the founders' own wallets. NovaTech was not a trading firm that went bad — on the evidence presented, it was a distribution machine for other people's money with a trading prop attached.

The case also marks a shift in how aggressively regulators are pursuing crypto Ponzi operators — lifetime industry bans for promoters, default judgments against fugitive founders, and on-chain tracing that makes the old "the money is offshore" defense harder to run. For victims, recovery will be slow and partial. For everyone else in crypto, the lesson is the oldest one in finance: if the returns are guaranteed, what's actually guaranteed is that someone else's deposit is paying them.