SEC Sues Texas Man For $12.3 Million Crypto Asset Fraud – Details

The US Securities and Exchange Commission (SEC) is pressing charges against Nathan Fuller, a Texas resident, for running a multi-million dollar crypto investment fraud scheme. The case, filed at the US Southern District of Texas, seeks several penalties against the defendant for allegedly defrauding 150 victims.

In a press release on May 28, the SEC stated that Fuller had adverted to and sold interests in a joint-venture crypto trading scheme under the company Privvy Investments LLC, linked to the business names Privvy Investments and Gateway Digital Investments. The man from Cypress allegedly promised some investors gains of 40%-50% within 30 days, and others a ridiculously audacious return of 100% in 21 days. The Commission explains that Nathan Fuller had lured unsuspecting victims of his fraudulent scheme with a business model centered around AI-based trading bots that executed high-frequency arbitrage trading on several crypto exchanges. Moreover, the insurance promises included a surety bond, a professional liability insurance policy, and clearance from the Federal Deposit Insurance Corporation.

150 Investors Swindled In Classic Crypto Ponzi Scheme

According to the SEC’s report, Fuller’s crypto asset investment fraud ran from around October 2022 to mid 2024. Over this period, the defendant raised $12.3 million from 150 investors. Despite promises of lofty gains from an AI-enabled trading bot, the SEC’s investigations revealed that Fuller had grossly misappropriated investors’ funds for two primary purposes. Firstly, the Texas resident had spent $6.2 million on personal expenses, including luxury items, gambling tours, and a house valued at nearly $1 million for his ex-wife. Meanwhile, Fuller also deployed $5.5 million to make Ponzi-like payments, thereby creating an illusion of a functional trading scheme to keep attracting more investors. Fuller is charged with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, which cover the unlawful offer and sale of unregistered securities, as well as fraudulent and deceptive practices in connection with the purchase or sale of securities.

The Commission is pressing for multiple penalties against Fuller, including permanent injunctions, restitution of ill-gotten gains with prejudgment interest, and imposition of civil monetary penalties.

Crypto Market Overview

At the time of writing, the total crypto market cap is $2.48 trillion, representing an approximately 9% decline over the past week. This market loss has come amid a broader bearish price sentiment across Bitcoin and other crypto assets.