The Securities and Exchange Commission has charged a Texas man with running a crypto fraud scheme that collected $12.3 million from roughly 150 investors by falsely claiming to use AI-powered trading bots to generate guaranteed returns.
Nathan Fuller, a resident of Cypress, Texas, operated the scheme through his company Privvy Investments, LLC and under the assumed business name Gateway Digital Investments between at least October 2022 and mid-2024. according to to the SEC’s complaint filed in the U.S. District Court for the Southern District of Texas.
Fuller allegedly promised investors returns of 40% to 50% within 30 to 45 days, with some saying they could make guaranteed profits of more than 100% in just 21 days. To support his argument, he argued that investors’ funds were secured by a bond, insured by the Federal Deposit Insurance Corporation (FDIC) and protected by a professional indemnity insurance policy. None of that was true, the SEC claimed.
Source: SEC
At the heart of the scheme were proprietary AI-based trading bots that Fuller claimed would conduct high-frequency arbitrage trading on crypto platforms. “Fuller’s bots did not function as represented,” the complaint said.
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Half of the collected money went to personal expenses
Of the $12.3 million raised, Fuller allegedly embezzled at least $6.2 million for personal expenses and used roughly $5.5 million to pay earlier Ponzi-like investors. In order for the scheme to continue, he sent false bank statements and false correspondence from fictitious entities to investors.
The SEC is seeking permanent injunctions, forfeiture of ill-gotten gains and civil penalties.
The Fuller case comes at a time when the combination of artificial intelligence and crypto has opened new frontiers for bad actors. Last year, the agency packed multiple crypto platforms and investment clubs in a separate $14 million scheme that also relied on AI branding to attract retail investors, with scammers posing as financial experts 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 accused crypto CEO Donald Basile and two companies he controlled of raising roughly $16 million from hundreds of investors through false claims related to a crypto token called Bitcoin Latinum.
Despite the recent moves, the agency acknowledged that some of its past enforcement actions against crypto companies did not have a clear benefit for investors and misinterpreted federal securities laws. In a 2025 enforcement results statement, the regulator said it had opened 95 proceedings and imposed $2.3 billion in penalties since fiscal 2022 for accounting violations that “did not identify any direct harm to an investor” and “did not produce any benefit or protection to investors.”
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