The Securities and Exchange Commission has charged a Texas man with running a cryptocurrency fraud scheme that raised $12.3 million from approximately 150 investors by falsely claiming to utilize AI-powered trading bots to generate guaranteed returns.
Nathan Fuller, a resident of Cypress, Texas, operated the program through his company Privvy Investments, LLC and under the adopted name Gateway Digital Investments from at least October 2022 through mid-2024, According to to an SEC complaint filed in the United States District Court for the Southern District of Texas.
Fuller allegedly promised investors returns of 40-50% within 30-45 days, with some claiming guaranteed returns of more than 100% could be achieved in as little as 21 days. To support his argument, he argued that the investors’ funds were secured by a bond, insured by the Federal Deposit Insurance Corporation (FDIC), and protected by a professional liability insurance policy. None of this was true, the SEC claims.
Source: SEC
At the center of the program were proprietary AI-powered trading bots that Fuller said would conduct high-frequency arbitrage trading on crypto platforms. The complaint states that “Fuller’s bots did not perform as they were represented.”
Related: SEC Commissioner Peirce defends crypto privacy tools against surveillance pressures
Half of the money collected was spent on personal expenses
Of the $12.3 million raised, Fuller allegedly misappropriated at least $6.2 million for personal expenses and used approximately $5.5 million to make Ponzi-type payments to prior investors. To continue the scheme, he sent investors false account statements and fabricated correspondence from fictitious entities.
The SEC is seeking indefinite injunctions, disgorgement of ill-gotten gains and civil penalties.
Fuller’s case comes as the combination of artificial intelligence and cryptocurrencies has opened modern frontiers for bad actors. Last year the agency accused multiple crypto platforms and investment clubs in a separate $14 million scheme that also relied on AI branding to lure retail investors, with fraudsters posing as financial professionals in WhatsApp groups and promising profits from AI-generated trading tips.
Related: SEC Approves Paxos as ‘Blockchain-Native’ Clearing Agency.
SEC charges Donald Basile with $16 million crypto scheme
Last month, the SEC charged cryptocurrency executive Donald Basile and two companies he controlled with collecting about $16 million from hundreds of investors through false claims related to a crypto token called Bitcoin Latinum.
Despite the latest moves, the agency has admitted that some of its past enforcement actions against crypto companies have failed to clearly benefit investors and have misinterpreted federal securities laws. In a statement on its 2025 enforcement results, the regulator said it had filed 95 prosecutions and assessed $2.3 billion in penalties since fiscal year 2022 for book and record violations that “did not demonstrate any direct harm to investors” and “provided no benefit or protection to investors.”
Warehouse: AI-powered hacks could kill DeFi – unless projects start acting now
