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The U.S. Securities and Exchange Commission has charged Texas resident Nathan Fuller with running an alleged $12.3 million crypto asset fraud.
The SEC says Fuller raised funds from roughly 150 investors by falsely claiming he used proprietary AI trading bots to generate high-frequency arbitrage profits. The agency filed the civil complaint on May 28 in the Southern District of Texas.
SEC Says 150 Investors Bought AI Trading Pitch
The SEC says Fuller operated through Privvy Investments LLC and the assumed names Privvy Investments and Gateway Digital Investments from at least October 2022 through mid-2024.
Regulators allege he sold joint-venture interests in what he described as a low-risk crypto trading strategy powered by AI. The complaint says the trading system did not operate as represented.
Complaint Cites 100% Profit Claims in 21 Days
The SEC alleges Fuller promised some investors returns of 40% to 50% within 30 to 45 days. In some cases, he allegedly guaranteed profits of more than 100% in as little as 21 days.
He also allegedly claimed the bots used stop-loss coding that limited losses to 3%. The SEC says only about $380,000, or roughly 3% of the money raised, was actually used to buy crypto assets.
SEC Alleges Fake Insurance and License Claims
The complaint says Fuller fabricated investor protections to make the scheme look safer. He allegedly claimed investor funds were backed by a surety bond, FDIC insurance, a money-transmitter license and professional-liability coverage.
Regulators also allege he sent fake account statements and fabricated correspondence from sham entities. The SEC says those materials were used to reassure investors after withdrawal problems began.
Fuller Allegedly Used $6.2M for Personal Costs
The SEC alleges Fuller misappropriated at least $6.2 million for personal expenses. The spending allegedly included a roughly $1 million house, gambling, trading cards, travel, a Jeep and other costs.
The agency also says Fuller used about $5.5 million to make Ponzi-like payments to earlier investors. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest and civil penalties. The case is civil, and Fuller will have the opportunity to respond in court.
