The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Nathan Fuller, a Texas resident, accusing him of defrauding approximately 150 investors out of $12.3 million through a fraudulent cryptocurrency investment scheme. The complaint alleges that Fuller misrepresented the capabilities of AI-powered trading bots, promising guaranteed returns and insurance protections.
According to the SEC’s complaint, which was submitted to the U.S. District Court for the Southern District of Texas, Fuller operated under the names Privvy Investments LLC and Gateway Digital Investments. The SEC claims that Fuller sold passive joint-venture interests in a supposed crypto arbitrage trading operation from October 2022 until mid-2024.
Fuller allegedly claimed that his proprietary AI-based trading bots could effectively scan cryptocurrency markets, execute high-frequency arbitrage trades, and mitigate losses through stop-loss coding. Investors were reportedly promised returns ranging from 40% to 50% within 30 to 45 days, with some claims exceeding 100% in less than a month.
However, the SEC asserts that these claims were unfounded. The agency reports that only about $380,000, or roughly 3% of the total investor funds, was actually used to purchase cryptocurrency, and these transactions were conducted without the involvement of the advertised trading bots, resulting in no profits.
Instead of investing the funds as promised, Fuller is accused of misappropriating at least $6.2 million for personal expenses, which included purchasing a home, gambling, travel, and vehicles. Additionally, he allegedly used around $5.5 million to make payments to earlier investors in a manner reminiscent of a Ponzi scheme.
As concerns about withdrawals grew among investors, Fuller reportedly fabricated account statements to show fictitious gains and referenced non-existent entities. He even generated a letter using artificial intelligence, purportedly from an auditing firm, claiming that investor accounts were under review and would eventually be liquidated into a trust.
The SEC’s charges include violations of the registration and antifraud provisions of federal securities laws. The agency is seeking permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and a ban on Fuller’s participation in future securities offerings.
This legal action follows a separate bankruptcy proceeding in which Fuller was denied discharge of over $12.5 million in debt after admitting to operating Privvy as a Ponzi scheme and fabricating documentation, according to records cited by the Justice Department.
Nathan Fuller has been charged by the SEC for allegedly defrauding investors in a cryptocurrency scheme, misusing funds for personal expenses while promising unrealistic returns. The case highlights ongoing concerns about fraudulent practices in the crypto investment space.