New York AG Seeks $1.37 Billion From NovaTech Founders After Default
By Crypto Wire
October 23, 2026
New York Attorney General Letitia James is asking a court to order NovaTech founders Cynthia and Eddy Petion to pay about $1.37 billion in damages, disgorgement, and prejudgment interest after an August 2025 default judgment — while four top promoters will pay nearly $6 million and take permanent industry bans — per the AG’s October 22, 2026 press release, same-day wraps into October 23 from The Block and Decrypt, and the OAG’s inquest affirmation filed in New York County. The figure is a court request, not yet an award; the AG’s office says the Petions fled the country and failed to appear. This is a Rug Room chapter: state enforcement on an alleged crypto pyramid — not a smart-contract exploit and not a federal stablecoin rulemaking.
Case map from the same materials: the June 2024 suit targeted NovaTechFx and AWS Mining for recruiting through prayer groups, social media, and WhatsApp — especially Haitian communities — with high-return and recruitment-bonus pitches. The AG says more than 11,000 New Yorkers invested. CoinPayments-linked records cited in coverage put investor crypto deposits near $1.16 billion (Aug 2019–May 2023), while only about $26 million reached trading provider B2Broker; prosecutors say purported profits and bonuses were paid from new investors. Promoter settlement totals named by the AG: Martin Zizi $2.9M, Frantz Ciceron $2.05M, James Corbett $750K, Ricardo Roy Sr. $275,861 — all permanently banned from securities, commodities, and crypto. The inquest itemizes about $1.135 billion principal plus $232.5 million interest for the NovaTech defendants / Petions. Desk rule: treat dollar figures as AG allegations and filings; do not invent recovery odds for fled defendants or victim payout schedules the primaries have not published.
For enforcement desks, the cut is two tracks on one day: cash settlements with banned promoters versus a nine-figure ask against defaulted founders abroad. Keep separate from Initia’s MoveVM mint halt (11053), Blumenthal’s Tether/Nxum records demand (11069), and Ireland’s Coinbase Ireland fine already on the wire. AWS Mining’s earlier collapse and NovaTech’s May 2023 shutdown are background that frames the deposit-vs-trading gap — not a new on-chain incident today.
For Rug Room desks, the signal is enforcement arithmetic: New York locked nearly $6 million and bans from promoters while asking the court for about $1.37 billion from fled NovaTech founders — a request, not a collected judgment.
What changes for desks: Watch whether the court enters the inquest award; whether any Petion assets surface for collection; and how the AG sequences victim distributions from the promoter settlements versus any later founder recovery.
Bottom line: New York seeks about $1.37 billion from fled NovaTech founders while locking nearly $6 million and industry bans from four promoters.
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