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The U.S. Securities and Exchange Commission ( SEC ) is suing a crypto startup , NovaTech , for allegedly fraudulently raising more than $ 650 million from over 200,000 investors , many in the Haitian - American community .
The SECframesNovaTech , ground in 2019 by husband - and - wife duo Cynthia and Eddy Petion , as a multi - unwavering marketing ( MLM ) dodging — one that lure investors by take to invest in profitable crypto and foreign exchange markets . In Sojourner Truth , NovaTech reserved only a fraction of investor funds for trading , devoting the bulk to its defrayal to be investor and delegacy for promoters , agree to the SEC .
The Petions siphoned millions of dollar bill of investor asset for themselves , alleges the SEC . And when the company collapsed , most customers — recruited by promoters who downplayed NovaTech ’s cherry-red flag — detect themselves ineffectual to make withdrawal .
“ NovaTech and the Petions caused untold losses to tens of one thousand of victims around the world , ” Eric Werner , director of the SEC ’s Fort Worth regional position , said in a financial statement . “ As we allege , MLM schemes of this size call for impresario to fuel them , and today ’s military action attest that we will hold accountable not just the principal architects of these monumental outline , but also promoters who spread their sham by unlawfully soliciting victims . ”
In plus to NovaTech and the Petions , the SEC names NovaTech promoters Martin Zizi , Dapilinu Dunbar , James Corbett , Corrie Sampson , John Garofano and Marsha Hadley as defendants in its securities anti - fraud suit . The means is seek lasting injunctive sculptural relief , emesis of ill - let gains and civil penalty ; Zizi has already agreed to partially settle .
“ Overall , this , deplorably , seems to be a schoolbook chemical attraction group ponzi dodge , ” Seth Goertz , married person at law firm Dorsey & Whitney and former assistant U.S. attorney with the Department of Justice , told TechCrunch via electronic mail . “ The sizing and scurf of the scheme is remarkable , though , and you always wonder whether it would have been possible if it was tied to traditional fiat currency , rather than cryptocurrency , which rest ethereal enough that fraudsters can more easily promise grand returns . ”
The suit against NovaTech is only the latest development in the SEC ’s broader crackdown on legally in question crypto venture .
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In 2020 , the SECtookRipple , the blockchain developer and creator of the XRP cryptocurrency token , to court for allegedly elevate more than $ 1.3 billion in 2013 by trade XRP in an unregistered security offering to investor . Just last month , the SECchargedBitClout laminitis Nader Al - Naji with faker , saying that the proceeds from the startup ’s crypto activities pay for Al - Naji ’s LA mansion and gift . And the SEC has mail letters to VCs over their participation with decentralized crypto exchange operator Uniswap Labs , reportedAxios on Monday .
In a recentaddressat the William & Mary Business Law Review , Gurbir Grewal , theatre director of the SEC ’s air division of enforcement , said that the agency has take over 100 crypto - link actions over the past X .
