New York Attorney General Letitia James is seeking nearly $1.37 billion from NovaTech founders Cynthia and Eddy Petion, the couple behind a crypto investment scheme that pulled in more than $1.16 billion in deposits, according to The Block's reporting on a court filing Thursday.
The ask breaks down into $1.13 billion in disgorgement plus $232.5 million in prejudgment interest. It follows a default judgment in August 2025, entered after the Petions failed to respond to the lawsuit at all. James' office says the couple has since fled the country.
The math is the whole story
The filing, citing CoinPayments records, says investors deposited $1.16 billion worth of crypto into NovaTech's wallet between August 2019 and May 2023. Here is where it went. At least $134.5 million in withdrawals landed in wallets belonging to the Petions, with Cynthia authorizing the transfers. The company sent $25.99 million to trading platform provider B2Broker over roughly the same period, and traders lost $18.19 million of that.
Read those numbers again. A billion dollars came in. About 2% of it ever touched an actual trading platform, and most of that got lost anyway. Meanwhile nine figures flowed to the founders. Prosecutors say NovaTech paid out supposed trading profits and recruitment bonuses using money from new investors rather than trading gains, which is the arithmetic of a Ponzi scheme whatever label the lawsuit uses. The trading operation was set dressing.
I keep coming back to how little effort this took to disguise. No fake exchange, no elaborate spoofed performance reports described in the filing. Just a wallet, a recruitment pitch, and a promise.
Who got targeted
James sued NovaTech and a crypto mining company called AWS Mining back in June 2024, alleging both ran illegal pyramid schemes. In her statement, she said the operations "scammed thousands of vulnerable New Yorkers" and "targeted immigrant and religious communities with the promise of a better life."
That part matters. A recruitment-bonus structure only works if people bring in people who trust them, and the AG's description tells you exactly whose trust got spent.
Four promoters tied to the case have agreed to pay nearly $6 million in disgorgement for victims and accepted permanent bans from the securities, commodities, and crypto industries.
The collection problem
The $1.37 billion is a number on paper. The Petions are gone, and you cannot garnish someone you cannot find. The $6 million from the promoters is the money that might actually reach victims. The rest depends on whether the founders left assets anywhere a US court can reach, and the reporting so far does not answer that.
James has been working through a backlog of crypto fraud cases, including a deal worth up to $35 million from former Celsius CEO Alex Mashinsky earlier this month. The pattern is hard to miss. The frauds were years ago. The bills arrive now, in installments, long after the people who cashed the checks have left the jurisdiction. Whether any of the $1.37 billion ever lands is a question nobody can answer yet.
Sources
- The Block: New York seeks over $1.3 billion from NovaTech founders after couple fled the US
- The Block: New York AG secures up to $35 million from former Celsius CEO Alex Mashinsky