SEC Charges Texas Man With $12.3 Million Crypto Fraud Using Fake AI Trading Bots

TLDR

• Nathan Fuller raised $12.3 million from ~150 investors using fake AI trading bots
• Investors were promised returns of 40–100%+ in as little as 21 days
• Only 3% of funds ($380,000) was actually used for crypto trading
• Fuller allegedly spent $6.2 million on personal expenses including a home, gambling, and vehicles
• He used fabricated statements and an AI-generated letter to cover up the fraud

Nathan Fuller, a Texas man from Cypress, has been charged by the U.S. Securities and Exchange Commission for allegedly running a $12.3 million crypto fraud scheme. The SEC filed its complaint in the U.S. District Court for the Southern District of Texas.

Fuller operated through Privvy Investments LLC and Gateway Digital Investments between at least October 2022 and mid-2024. He raised money from around 150 investors.

The Promises He Made

Fuller told investors his proprietary AI-powered trading bots would scan crypto markets and execute high-frequency arbitrage trades. He claimed losses were limited through stop-loss coding built into the bots.

Investors were promised returns of 40% to 50% within 30 to 45 days. Some were told they could earn over 100% in as little as 21 days.

Fuller also told investors their money was protected by a surety bond, insured by the Federal Deposit Insurance Corporation, and covered by a professional liability policy. The SEC says none of those claims were true.

Where the Money Actually Went

Of the $12.3 million raised, only about $380,000 — roughly 3% — was used to buy cryptocurrency. No bots were involved, and those trades generated no profits.

Fuller allegedly took at least $6.2 million for personal use. That money went toward buying a home, gambling, travel, and vehicles.

Around $5.5 million was used to make Ponzi-like payments to earlier investors to keep the scheme going.

How He Tried to Cover It Up

As investors began asking to withdraw funds, Fuller sent out fake account statements that showed gains.

He also referenced fictitious entities in correspondence with investors. To further mislead them, he used artificial intelligence to generate a letter from a fake auditing firm. The letter claimed investor accounts were under review and would be moved into a trust.

What Happened Before the SEC Case

A separate bankruptcy proceeding preceded the SEC charges. In that case, the Justice Department said Fuller was denied a discharge of more than $12.5 million in debt. Fuller admitted in those proceedings that he ran Privvy as a Ponzi scheme and fabricated documentation.

What the SEC Is Seeking

The SEC has charged Fuller with violating federal securities laws, including registration and antifraud provisions. It is seeking permanent injunctions, disgorgement of funds, civil penalties, and a ban on Fuller participating in future securities offerings.

This case follows a separate $14 million scheme charged last year, where fraudsters used AI branding to lure retail investors through WhatsApp groups.

The SEC also charged crypto executive Donald Basile last month in a separate $16 million fraud tied to a token called Bitcoin Latinum.

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