The US Securities and Exchange Commission (SEC) has filed suit against Nathan Fuller, a Texas resident accused of running a crypto fraud scheme that collected $12.3 million from approximately 150 investors. Fuller allegedly promised extraordinary returns through an AI-driven crypto trading system that never existed.
Fuller marketed the scheme under Privvy Investments LLC, claiming it operated high-frequency arbitrage trading bots on various cryptocurrency exchanges. Investors were lured with promises of up to 50% gains within 30 days, and in some cases, returns of 100% within just three weeks. The pitch included purported insurance safeguards like surety bonds, professional liability coverage, and assurances of FDIC clearance, all designed to lure unsuspecting investors.
The SEC’s investigation revealed that Fuller misappropriated the funds for personal indulgences and to sustain the illusion of profitability. Approximately half of the money raised was spent on luxury purchases, gambling trips, and real estate, including an expensive house gifted to his ex-wife. The other half was used to pay returns to earlier investors, resembling a typical Ponzi structure.
Fuller faces charges for the unlawful sale of unregistered securities and fraudulent practices under several provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions to halt Fuller’s activities, restitution of the defrauded funds including interest, and civil penalties.