Thousands of NovaTech FX investors can't get their money out, and the company is blaming its payment processor.
NovaTech FX told investors on Telegram this week that CoinPayments, which handles cryptocurrency transactions, has created a bottleneck. The problem is specific to tether withdrawals, the company says. Investors request their USDT funds, NovaTech approves the transfers and marks them as sent in its system, but the transactions get rejected on the blockchain. CoinPayments either can't process them or the receiving exchange refuses the deposits, according to NovaTech.
"We have brought this issue up to CoinPayments, who has attempted to whitelist exchanges in order to avoid further issue, but it still seems to be randomly occurring," the company wrote to investors. The solution offered: use different cryptocurrencies instead.
CoinPayments presents itself as "the world's largest provider of cryptocurrency payment services." Behind the marketing, the processor is murky. It operates through UAB Star Ventures, a Lithuanian shell company. The user agreement points to the British Virgin Islands and the London Court of International Arbitration. Co-founder Sina Mirzaie and current head Dennis Pederson both live in British Columbia, Canada, as do the people managing CoinPayments' official Facebook page—though posts also come from Bulgaria and the Czech Republic.
The withdrawal crisis hits as NovaTech FX reels from a securities fraud warning issued by the British Columbia Securities Commission earlier this month. Whether regulatory pressure caused the payment problems remains unknown. Agencies don't typically disclose ongoing investigations until they file enforcement actions.
One detail stands out: the United States generates the majority of traffic to both NovaTech FX's and CoinPayments' websites. CoinPayments' terms explicitly reserve the right to freeze accounts and block transactions without notice if the company determines an account involves "prohibited activity."
NovaTech FX has admitted it's a Ponzi scheme that commits securities fraud. Earlier this year, CoinPayments dumped OneCoin—another notorious fraud—within 48 hours of getting bad press. That suggests at least some schemes violate CoinPayments' terms of service.
The timing is notable. As withdrawal problems spread, NovaTech FX co-founder and CEO Cynthia Petion announced the company has deleted all queued support tickets. She called it a drastic measure but offered little explanation for why the company wiped its customer service queue while investors were locked out of their funds.
🤖 Quick Answer
What withdrawal issues are NovaTech FX investors experiencing?NovaTech FX investors report inability to withdraw funds, specifically USDT tether transactions. The company claims CoinPayments payment processor creates bottlenecks, with transfers approved internally but rejected on blockchain. Receiving exchanges refuse deposits or processing fails randomly despite whitelisting attempts.
Why does NovaTech FX blame CoinPayments for withdrawal problems?
NovaTech FX attributes delays to CoinPayments' cryptocurrency transaction handling. The company states approved USDT transfers are marked sent but rejected during blockchain processing. CoinPayments either cannot process transactions or receiving exchanges refuse deposits, causing systematic withdrawal failures.
How is NovaTech FX attempting to resolve the CoinPayments withdrawal bottleneck?
NovaTech FX reported raising the issue with CoinPayments, which attempted whitelisting exchanges to prevent
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