SEC charges Texas man in $12.3M fake AI crypto scam

The Securities and Exchange Commission filed a complaint in the U.S. District Court for the Southern District of Texas charging Nathan Fuller of Cypress, Texas. The SEC alleges Fuller raised about $12.3 million from roughly 150 investors between October 2022 and mid-2024 through Privvy Investments LLC and an assumed name, Gateway Digital Investments.

The complaint alleges Fuller told investors their funds would be managed by proprietary, AI-based high-frequency arbitrage trading bots and guaranteed large, rapid returns. Investors were promised 40% to 50% returns in 30 to 45 days, and some were told they could earn more than 100% in as little as 21 days.

To support the pitch, Fuller allegedly told investors their capital was protected by a surety bond, insured by the Federal Deposit Insurance Corporation, and covered by a professional liability policy. The SEC states those claims were false and that the bots “did not function as represented.”

Of the approximately $12.3 million the SEC alleges Fuller raised, at least $6.2 million was used for personal expenses and about $5.5 million was paid to earlier investors in what the complaint describes as Ponzi-like payments. The SEC alleges Fuller provided fake account statements and fabricated correspondence from sham entities to maintain the scheme.

The SEC seeks permanent injunctions, disgorgement of ill-gotten gains and civil penalties. The complaint names Privvy Investments and Gateway Digital Investments as the vehicles Fuller used to solicit funds. Court proceedings will determine any remedies if the allegations are proved.

The filing notes the case is part of a trend of enforcement actions in which defendants used AI-related marketing and crypto products to attract retail investors. The agency previously brought other cases alleging similar use of AI branding and token-related fraud.