SEC Targets $650M Crypto Pyramid Scheme, NovaTech, in Major Legal Action

• The SEC charged NovaTech with running a $650 million Ponzi scheme with over 200,000 investors mostly from churchgoers.
• The founders and promoters of NovaTech used religious themes as a means to attract victims, claiming divine direction for their criminal activities.
• The collapse of NovaTech began in 2022, leading to legal actions including a partial settlement from one promoter, Martin Zizi.

A key legal coup in the SEC’s ongoing campaign against fraudulent cryptocurrency enterprises, the United States Securities and Exchange Commission has filed a case against NovaTech, a supposedly fraudulent cryptocurrency pyramid scheme charged with defrauding investors of $650 million.

The case was launched shortly after New York Attorney General Letitia James filed a comparable action two months earlier. According to the SEC’s complaint, NovaTech took advantage of susceptible affinity groups—mainly Haitian Creole-speaking churchgoers—through the use of dishonest methods at promotional events and on WhatsApp.

The Actual Ponzi Scheme and Its Impact

According to the SEC, most of the funds were used to pay for a classic Ponzi scheme, with only a small portion ever invested. To deepen the scam, the SEC’s case also alleges that the Petions moved millions of dollars in investor cash to themselves.

According to sources, the scheme—elaborate in the hands of its founders Cynthia and Eddy Petion, NovaTech—ripped off over 200,000 investors worldwide between June 2019 and May 2023.

Promoters and the Fall of NovaTech

The SEC case also names eight other promoters that have integral roles in the scheme alongside the Petions. Defendants James Corbett and Martin Zizi join a long list of those charged with violating federal securities laws.

Furthermore, they attributed it by adding religious connotations to the marketing material: they called Cynthia Petion the “Reverend CEO” and claimed divine inspiration for the founding of the company.

Investors encountered lengthy delays when attempting to withdraw their funds, which finally caused the Ponzi scheme to fail in October 2022. Due to this, a lot of damage had already been done by the time state securities authorities in the US and Canada issued a cease-and-desist order against NovaTech in January 2023. There was very little chance for investors to get their money back when the company collapsed in May 2023.

In response to the claims by the SEC, Martin Zizi has now agreed to a partial settlement. He has agreed not to commit a future crime connected with securities at all times; this shall be a permanent disqualification juxtaposed against a $100,000 civil penalty, which Zizi has agreed he shall pay,masındaˇ-based on the existing circumstances. The SEC seeks disgorgement with interest, civil penalties, and permanent injunctive relief against each and every defendant in the scheme under these circumstances.