The Securities and Exchange Commission has filed a federal lawsuit against a Texas man for allegedly orchestrating a fraudulent cryptocurrency investment scam that raised approximately $12.3 million from close to 150 investors. The scheme promised profits generated by proprietary artificial intelligence trading bots, which the agency says never delivered as claimed.
According to the SEC complaint, Nathan Fuller, operating through entities named Privvy Investments, LLC and Gateway Digital Investments, pitched investments in AI-powered crypto arbitrage trading ventures. He promised investors extraordinary returns, suggesting gains of 40 to 50 percent within 30 to 45 days and even guaranteeing returns exceeding 100 percent in just three weeks. Fuller also assured investors their funds were secure via surety bonds, FDIC insurance, and liability coverage—claims the SEC states were false.
The agency detailed that instead of using investor money as advertised, Fuller redirected at least $6.2 million toward personal spending and around $5.5 million toward payouts resembling a Ponzi scheme. To maintain investor confidence, he circulated fabricated account statements and correspondence from fictitious companies, disguising the misuse of funds.
This case highlights ongoing risks within the cryptocurrency sector, which has faced scrutiny for volatility and fraud. The SEC pointed out that Fuller capitalized on the intersection of emerging technologies—AI and crypto—to present a seemingly foolproof investment that exploited investor trust.
The SEC is pursuing permanent injunctions against Fuller, the recovery of ill-gotten gains with additional prejudgment interest, and civil penalties. The complaint remains pending in federal court, with regulators seeking accountability and restitution for affected investors.