St Vincent and Grenadine based asset manager Novatech is the latest firm to further signal the growing crisis within the cryptocurrency market. Novatech markets itself as offering users low risk, fully automated PAMM accounts. Users deposit Ethereum or Bitcoin and Novatech utilizes its proprietary trading strategy to “guarantee” gains of 1.65%-4.75%. It’s promises have been under augmented scrutiny as the recent crypto crash has upended the industry and various firms are facing liquidity pressures and counterparty credit defaults on staked coins. The Financial Bureau has received various reports of users not being able to log in or having access to their accounts restricted. Novatech’s struggles are akin to Eddy Alexandre’s EminiFx scandal, a former Novtech employee, who’s scheme was covered in depth by the Washington Post.
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Novatech is amongst many in the sea of red that has resulted in losses for many investors and businesses. Crypto platforms Voyager and Celsius, once seen as reliable enterprises to obtain high yields, have both declared Chapter 11 Bankruptcy.The Securities and Exchange Commission, the premier enforcer of financial regulations in the United States, has doubled its crypto fraud investigation staff amidst widespread carnage in the market. It remains to be seen if the SEC will have jurisdiction over firms incorporated abroad operating in the American markets or who cater to US citizens.
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