The U.S. Securities and Exchange Commission (SEC) has sued Nathan Fuller, a Texas resident, alleging that he raised approximately $12.3 million from approximately 150 investors through a crypto investment scheme built around false claims about AI-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 under the assumed trade names Privvy Investments and Gateway Digital Investments.
The SEC claims he sold passive joint venture interests in an alleged crypto arbitrage trading operation from at least October 2022 until mid-2024.
The agency claims Fuller told investors that proprietary AI-powered trading bots could analyze crypto markets, execute high-frequency arbitrage trades, and limit losses through stop-loss coding.
The complaint alleges that investors were promised returns of 40 to 50 percent within 30 to 45 days and, in some cases, exceeding 100 percent in less than a month.
The SEC says these statements were false. According to the complaint, only about $380,000, or about 3% of investors’ funds, were used to purchase cryptocurrencies without the intervention of bots. The agency claims that these transactions were carried out without the advertised robots and did not generate any profit.
Fuller, in contrast, allegedly embezzled at least $6.2 million for personal expenses, including home purchases, gambling, travel and vehicles, while using approximately $5.5 million to make “Ponzi payments” to investors.
As withdrawal problems grew, the complaint says, Fuller created fabricated account statements showing winnings, referenced fictitious entities and used artificial intelligence to generate a letter from a purported auditing firm claiming that investors’ accounts were under review and would then be liquidated into a trust.
The SEC has charged Fuller with violating the registration and antifraud provisions of the federal securities laws and is seeking permanent injunctions, disgorgement, civil penalties and a bar from participating in securities offerings.
The case follows separate bankruptcy proceedings in which the Justice Department said Fuller was denied discharge of more than $12.5 million in debts after admitting he operated Privvy as a Ponzi scheme and fabricated documents, according to court records cited by the DOJ.
