New York AG seeks $1.37 billion from NovaTech founders over crypto Ponzi scheme

What the AG is asking for

The AG is seeking the return of about $1.13 billion in investor funds, plus $232.5 million in interest, according to the filing. The $1.37 billion is the amount the AG is asking for, not one the court has awarded.

Liability came by default. The court's August 2025 finding followed the defendants' failure to respond to the suit, so it wasn't the result of a trial on the merits.

The same motion separately seeks about $6.15 million, including interest, over AWS Mining, a crypto mining scheme that collapsed in 2019. James sued NovaTech and AWS Mining, along with other associated companies, in June 2024.

Where the money went

Investors deposited about $1.16 billion into NovaTech's crypto wallets between August 2019 and May 2023, the filing says. According to the attorney general, only about $26 million of that was sent to the platform's trading provider, B2Broker, for trading.

Twenty-six million out of $1.16 billion.

NovaTech collapsed in 2023, and tens of thousands of investors were left unable to withdraw their funds.

Promoters settle, victims wait

Four people who recruited investors into NovaTech have separately agreed to pay nearly $6 million in settlements intended to benefit victims, the AG's office said. The office also said more than 11,000 New Yorkers lost tens of millions of dollars through NovaTech and a prior crypto mining scheme, AWS Mining.

The recruiting is a big part of the case. The complaint alleged that promoters targeted Haitian and other immigrant communities through prayer groups, social media and WhatsApp, promising high returns and recruitment bonuses to the people who signed up.

What happens to any recovered money isn't clear yet. Cointelegraph asked the AG's office how recovered funds would be distributed and how the judgment would be enforced, but it hadn't received a response by publication.