Texan Accused of Masterminding $12.3 Million Crypto Fraud

The U.S. Securities and Exchange Commission (SEC) launched a lawsuit against Nathan Fuller, a Texas resident, accusing him of orchestrating a fraudulent investment scheme capitalizing on AI-driven crypto trading bots. According to the SEC, Fuller misled nearly 150 investors, gathering a staggering $12.3 million under false pretenses.

Nathan Fuller, trading as Privvy Investments and also known by Gateway Digital Investments, initiated his scheme between the end of 2022 and mid-2024, as cited in SEC documents. The complaint reveals that investors were lured by promises of extraordinary returns, with some expected to earn between 40 to 50 percent within a month to 45 days, and others guaranteed over 100 percent profit in mere weeks. Fuller assured these profits were backed by federal insurance and surety bonds, promises which the SEC has labeled as entirely misleading.

Was Artificial Intelligence Really at Work?

Fuller claimed to employ trading bots designed to exploit the crypto market using artificial intelligence and high-frequency trading strategies. However, the SEC’s investigation exposed these claims as fabrications.

“Fuller’s bots did not process investor funds as the investors believed,” the complaint detailed.

From the gathered $12.3 million, about $6.2 million was channeled towards Fuller’s personal expenditures. Fuller utilized an additional $5.5 million for payouts to early investors, perpetuating a Ponzi scheme-like operation. Investors were misled with counterfeit reports and communications purportedly from established corporations.

SEC Intensifies its Crackdown on Crypto Scams

The SEC seeks multiple actions against Fuller, including prohibitions, disgorgement of gains, and monetary fines. Notably, this case comes amid a growing pattern of AI-related crypto fraud, echoing a previous instance involving $14 million swindled through WhatsApp.

Investigations and Recent Trends

Recently, the SEC pursued another case against Donald Basile, owner of companies that allegedly defrauded investors with a digital currency named Bitcoin Latinum, raising $16 million. This continues the SEC’s rigorous oversight within the digital currency landscape.

The SEC acknowledged previous enforcement issues, where penalties had no direct investor benefit. Last year, the agency pursued 95 distinct crypto-related suits, accumulating $2.3 billion in penalties.

These developments underline the SEC’s intensified efforts to curb fraudulent activities in emerging digital markets.