The US Securities and Exchange Commission (SEC) has sued Texas resident Nathan Fuller, alleging that he raised about $12.3 million from about 150 investors through a crypto investment scheme built around false claims of AI-powered trading bots, guaranteed returns and insurance protection.
According to a complaint filed in the U.S. District Court for the Southern District of Texas, Fuller operated through Privvy Investments LLC and the assumed business names Privvy Investments and Gateway Digital Investments.
The SEC says he sold passive joint venture interests in an alleged crypto arbitrage trading operation from at least October 2022 to mid-2024.
The agency claims Fuller told investors that proprietary AI-based trading bots could scan crypto markets, execute high-frequency arbitrage trades and limit losses through stop-loss coding.
The complaint alleges that investors were promised returns of 40% to 50% within 30 to 45 days and in some cases over 100% in less than a month.
The SEC says those representations were false. According to the complaint, only about $380,000, or about 3% of investors’ funds, was used to buy cryptocurrency without the involvement of bots. The agency says these trades were executed without the advertised bots and did not generate any profit.
Instead, Fuller allegedly spent at least $6.2 million on personal expenses, including buying a home, gambling, travel and vehicles, while using about $5.5 million to make “Ponzi-style payments” to investors.
As withdrawal concerns grew, the complaint says, Fuller created fabricated bank statements showing gains, referenced fictitious entities and used artificial intelligence to generate a letter from a purported accounting firm claiming investor accounts were under audit and would later be liquidated into a trust.
The SEC charged Fuller with violating the registration and anti-fraud provisions of federal securities laws and is seeking permanent injunctions, disgorgement, civil penalties and a ban from participating in securities offerings.
The case follows a separate bankruptcy proceeding in which the Justice Department said Fuller was denied discharge of more than $12.5 million in debt after admitting he ran Privvy as a Ponzi scheme and fabricated documentation, according to court documents cited by the DOJ.
