The US Securities and Exchange Commission has sued the cryptocurrency company NovaTech , saying they fraudulently raised over USD 650 million from investors. The US Securities and Exchange Commission filed a lawsuit against the cryptocurrency company NovaTech and its co-founding couple, alleging they fraudulently raised over USD 650 million from more than 200,000 investors globally, including numerous Haitian-Americans.

The SEC said the co-founders instead used new money mainly to repay earlier investors and pay commissions to promoters, while siphoning millions of dollars for themselves. It said the scheme lasted for four years until NovaTech's May 2023 collapse. The lawsuit in Miami federal court came two months after a New York attorney sued NovaTech and the co-founders in a state court in Manhattan, estimating their fraud at more than USD 1 billion.

Supposed social engineering by NovaTech The regulators said NovaTech tried to appeal to victims' religious faith through social media, Telegram, and WhatsApp, and sometimes in the Haitian Creole language. They further called the fraud a pyramid scheme, where companies pay bonuses or commissions to recruit new investors. The SEC also charged six NovaTech promoters with fraud, saying they kept recruiting investors despite ‘red flags,’ such as delayed withdrawals and US and Canadian regulatory actions, that raised questions about NovaTech's legitimacy.

Both lawsuits seek restitution for victims and civil fines. The case is SEC v Nova Tech Ltd, US District Court, Southern District of Florida, No. 24-23058.

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