Summary:
- Fraud Allegations: The U.S. SEC has filed a lawsuit against cryptocurrency company NovaTech and its co-founders, accusing them of orchestrating a $650 million fraud scheme.
- Global Impact: The scheme allegedly targeted over 200,000 investors worldwide, with a significant number of victims being Haitian-Americans.
- Ponzi-Like Operation: According to the SEC, NovaTech used funds from new investors to repay earlier investors and paid commissions to promoters, all while siphoning off millions for personal gain.
- Collapse: The alleged fraudulent activities persisted for four years until the company collapsed in May 2023.
The U.S. Securities and Exchange Commission (SEC) has initiated legal action against cryptocurrency firm NovaTech and its co-founders, accusing them of fraudulently raising over $650 million from more than 200,000 investors across the globe. The SEC’s complaint highlights that a significant portion of the victims were Haitian-Americans, who were drawn into the scheme through false promises of high returns.
The SEC alleges that NovaTech operated a Ponzi-like scheme, where the funds from new investors were primarily used to repay earlier investors and to pay commissions to promoters. Meanwhile, the co-founders allegedly siphoned millions of dollars for their personal use. This fraudulent operation is said to have continued for four years before the company ultimately collapsed in May 2023.
The SEC’s lawsuit against NovaTech and its founders underscores the ongoing risks within the cryptocurrency space, particularly for vulnerable communities. The case is a stark reminder for investors to exercise caution and conduct thorough due diligence before investing in crypto-related ventures.
Disclaimer:
The information provided on 13Desk is for informational purposes only and should not be considered financial advice. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. Investing in cryptocurrencies carries risks, and you should only invest what you can afford to lose. 13Desk is not responsible for any financial losses incurred from your investment activities.
