The U.S. Securities and Exchange Commission (SEC) has sued Texas resident Nathan Fuller, alleging that he raised around $12.3 million from approximately 150 investors through a crypto investment scheme built around false claims of artificial intelligence-powered trading robots, guaranteed returns, and insurance protections.
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 trade names Privvy Investments and Gateway Digital Investments.
The SEC says it sold passive joint venture interests in an alleged crypto arbitrage trading operation from at least October 2022 to mid-2024.
The agency claims that Fuller told investors that proprietary AI-based trading robots could scan crypto markets, execute high-frequency arbitrage trades, and limit losses by coding stop-losses.
The complaint alleges that investors were promised returns of 40% to 50% within 30 to 45 days and, in some cases, greater than 100% in less than a month.
The SEC says those representations were false. According to the complaint, only about $380,000, or approximately 3% of investors’ funds, was used to purchase cryptocurrencies without the participation of robots. The agency says those transactions were made without the advertised bots and did not generate profits.
Fuller, instead, allegedly misappropriated at least $6.2 million for personal expenses, including the purchase of a home, gambling, travel and vehicles, while using about $5.5 million to make “Ponzi-like payments” to investors.
As concerns about the withdrawals grew, the complaint says, Fuller created false account statements showing profits, referenced fictitious entities and used artificial intelligence to generate a letter from a purported auditing firm that claimed investors’ accounts were under review and would later be settled into a trust.
The SEC charged Fuller with violating the registration and anti-fraud provisions of the federal securities laws and is seeking permanent injunctions, disgorgement, civil penalties and a ban on 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 that he operated Privvy as a Ponzi scheme and falsified documentation, according to court records cited by the DOJ.
