New York AG Pursues $1.37B From NovaTech Founders in Ponzi Case

New York Attorney General Letitia James is pushing to recover $1.37 billion from the founders of NovaTech, a cryptocurrency platform accused of operating a large-scale Ponzi scheme, according to court filings reviewed by Cointelegraph. The massive damages request follows a default judgment secured in August 2025, a legal milestone that cleared the way for the state to quantify the full financial harm inflicted on investors.

Alongside the primary damages pursuit, the AG's office announced settlements totaling nearly $6 million with four individuals who allegedly promoted the scheme. Settlement agreements with promoters are a common prosecutorial tool in fraud cases — they allow authorities to recover partial restitution faster while preserving resources to pursue the larger targets at the top of the alleged operation.

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The scale of the alleged fraud positions the NovaTech case among the more significant cryptocurrency enforcement actions brought by a state regulator in recent years. A $1.37 billion judgment, if fully enforced, would represent a substantial recovery for defrauded investors, though collecting on such awards — particularly when defendants have dispersed assets — remains one of the persistent challenges in white-collar enforcement.

The case underscores the growing willingness of state-level regulators to pursue crypto-related fraud aggressively and independently of federal agencies. New York has historically been one of the most assertive states on financial fraud enforcement, and the NovaTech action signals that posture is extending firmly into the digital asset space. Investors and industry participants should view this as a clear signal that promotional activity tied to unregistered or fraudulent crypto ventures carries significant legal exposure.

Continue reading at Cointelegraph.