NovaTech founders Eddie Petion and Cynthia Petion, along with several other members of the firm, are believed by the SEC to have orchestrated a scheme that allowed investors to bilk them more than half a billion dollars.
The company operated as a multi-level marketing (MLM) and digital asset investment program from 2019 to 2023. Investors were lured with promises of high returns by investing capital in the cryptocurrency market.
According to the regulator, the pyramid attracted at least 200,000 participants in dozens of countries. Instead of real profits, they received partial payments at the expense of other investors, officials say. The company’s management spent investors’ funds on personal enrichment, SEC commissioners claim.
“NovaTech and the Petion family have caused untold losses to tens of thousands of victims around the world. MLM schemes of this scale require promoters to fuel their operations, and today’s action shows that we will hold accountable not only the scheme’s principal architects, but also those who spread this fraud around the world,” the SEC.
The collapse of NovaTech has meant that most investors will not be able to get their money back. The organizers and participants of the cryptocurrency pyramid are accused of fraud and working without registration.
Earlier, the Seoul Central District Public Prosecutor’s Office’s Fifth Criminal Division transferred to court the case of Wacon CEO Byun Young-oh, who is accused of organizing a fraudulent crypto investment scheme.
Source: Bits
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