The U.S. Securities and Exchange Commission has zeroed in on a $650 million cryptocurrency pyramid scheme called NovaTech.

The company, which is registered in Saint Vincent and the Grenadines, pooled assets from investors in order to trade them and generate profits. NovaTech boasted about securing steady returns of up to 3% on a daily basis. It also claimed to be operating as a "registered hedge fund."

However, as the SEC alleges, the fraudulent company only traded an insignificant portion of the client's assets while suffering substantial losses instead of making profits. New deposits from uninitiated victims turned out to be NovaTech's only revenue source. Notably, they managed to recruit as many as 200,000 investors, according to the SEC lawsuit. 

The scheme was run by Cynthia Petion and Eddy Petion. The Petions used the funds that they received from investors to stuff their own pockets while also paying influencers and some earlier investors. The married couple was named in the lawsuit alongside those who helped to promote the fraudulent scheme and recruit new investors. These promoters were attempting to downplay various red flags in order to secure more funds from investors.  

The scheme eventually came to an end back in May 2023 after a lot of investors started struggling to withdraw their funds. NovaTech stopped its US operations, preventing investors from getting their money back. 

Cynthia Petion argued that the funds of the customers were lost due to a data breach. 

Earlier this year, the company also faced a lawsuit from New York Attorney General Letitia James.