The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against cryptocurrency company NovaTech and its co-founders, Cynthia and Eddy Petion, accusing them of fraudulently raising over $650 million from more than 200,000 investors worldwide, many of whom were Haitian-Americans. The SEC alleges that the Petions promised investors that their funds would be safe, with Cynthia Petion claiming they would be “in profit from day one.”
Instead, the SEC claims that the Petions used new investments to repay earlier investors, pay commissions to promoters, and siphon millions for themselves. The alleged scheme ran for four years before collapsing in May 2023.
This lawsuit, filed in Miami federal court, follows a similar lawsuit by New York Attorney General Letitia James, who estimated the fraud at over $1 billion. Both regulators have labeled the scheme a pyramid operation. The SEC also charged six NovaTech promoters with fraud.