New York AG Demands $1.37B From NovaTech Founders in Ponzi Case
New York's attorney general is pursuing $1.37B from NovaTech's founders after a default judgment, plus $6M in promoter settlements.
If you thought crypto scams were just a small-time problem, think again. New York Attorney General has set her sights on the founders of NovaTech, demanding a staggering $1.37 billion from them over what the state is calling a full-blown Ponzi scheme. That's billion with a B — making this one of the most significant crypto fraud recovery attempts in recent memory.
The massive dollar figure doesn't come out of nowhere. It follows a default judgment that was handed down in August 2025 against the NovaTech founders, meaning they essentially didn't show up to defend themselves in court and lost by forfeit. When that happens in a civil case, the judge can rule in the plaintiff's favor automatically — and clearly, the AG's office is now moving to collect on that ruling in a big way.
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But the founders aren't the only ones in the crosshairs. The AG also announced nearly $6 million in settlements reached with four promoters connected to the scheme. Promoters are basically the people who helped recruit new investors and spread the word about NovaTech — which is exactly how Ponzi schemes keep themselves alive. Getting money back from them, even a smaller amount, signals that the state is serious about holding the entire ecosystem of a fraud accountable, not just the people at the very top.
For everyday investors, this case is a stark reminder of how these schemes work: early participants often get paid using money from newer recruits, creating the illusion of a legitimate, profitable platform. By the time regulators step in, billions in losses have typically already accumulated. The $1.37 billion figure reflects the scale of harm alleged against real people who trusted NovaTech with their savings.
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