New York is seeking about $1.37 billion from Novatech founders Cynthia and Eddy Petion after a court entered a default judgment in a crypto fraud case. State filings show investors deposited more than $1.16 billion, while only about $26 million was sent to the platform used for trading.
Key Takeaways
- New York seeks $1.37B from NovaTech founders after a default judgment in the crypto fraud case.
- Investors sent $1.16B, but only $25.99M reached the trading platform, and most of that was lost.
- The case shows how massive crypto inflows can mask very little real investment activity.
Novatech Founders Face $1.37B Claim After Failing to Appear
New York is seeking one of the largest monetary recoveries tied to a crypto investment scheme.
Attorney General Letitia James has asked a state court to order Novatech founders Cynthia and Eddy Petion to pay $1.367 billion, including roughly $1.135 billion in disgorgement and $232.5 million in prejudgment interest. The request follows an August 2025 default judgment after the defendants failed to appear; the attorney general’s office says the couple fled the country.
The case centers on Novatech, which prosecutors say promised investors weekly crypto trading returns of roughly 2% to 4% while using incoming deposits to fund withdrawals and recruitment rewards.
$1.16 Billion Came In, Only $26 Million Reached Trading
The gap between deposits and actual trading is the most striking number in the filing.
Investors sent $1.1605 billion in cryptocurrency to Novatech’s Coinpayments wallet between August 2019 and May 2023, according to court documents. Yet just $25.99 million was deposited with B2Broker for trading. Novatech’s traders lost about $18.19 million of that amount.
New York says those figures undercut Novatech’s claims that investor returns were generated through successful crypto and forex trading.
At Least $134.5 Million Reached Founders’ Wallets
The filing also alleges Cynthia Petion authorized at least $134.5 million in cryptocurrency withdrawals from Novatech’s Coinpayments account to wallets belonging to herself and Eddy Petion.
The state argues that Novatech generated no legitimate trading profits sufficient to fund its promised returns. Instead, prosecutors say payouts came from money deposited by other investors.
More than 11,000 New Yorkers invested in Novatech and the earlier AWS mining operation, with Haitian and other immigrant communities specifically targeted through prayer groups, social media, and Whatsapp chats.
Four Promoters Agree to Nearly $6 Million
New York has separately reached settlements with four top promoters.
Martin Zizi, Frantz Ciceron, Ricardo Roy Sr, and James Corbett agreed to pay nearly $6 million combined and accepted permanent bans from the securities, commodities, and cryptocurrency industries.
The $1.37 billion request against the Petions is larger by orders of magnitude.
For the crypto industry, the case is a reminder that enormous onchain deposit totals can conceal remarkably little genuine investment activity. Here, prosecutors say more than a billion dollars entered the system while only a tiny fraction ever reached the trading operation investors were told would generate their returns.