SEC Sues Texas Man Over Alleged $12.3M Crypto AI Trading Ponzi Scheme

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Texas resident Nathan Fuller, accusing him of orchestrating a $12.3 million crypto investment fraud that allegedly misled around 150 investors with false claims about AI-powered trading technology, guaranteed profits, and investor protections.

According to the SEC complaint filed in the U.S. District Court for the Southern District of Texas, Fuller operated through Privvy Investments LLC, along with the business names Privvy Investments and Gateway Digital Investments. Regulators allege that from October 2022 through mid-2024, Fuller sold passive joint-venture interests tied to what he described as a sophisticated cryptocurrency arbitrage trading strategy.

The SEC claims Fuller promoted proprietary artificial intelligence trading bots that supposedly monitored crypto markets, executed high-frequency arbitrage transactions, and minimized risk through automated stop-loss mechanisms. Investors were allegedly promised returns ranging from 40% to 50% within 30 to 45 days, with some projections exceeding 100% in less than a month.

However, the SEC alleges these claims were misleading. Investigators say only about $380,000—roughly 3% of investor funds—was used to purchase cryptocurrency, and those trades were conducted without the advertised AI trading bots. The agency further states that the trading activity generated no profits.

Instead, Fuller allegedly diverted at least $6.2 million of investor money for personal use, including purchasing a home, funding gambling activities, travel expenses, and vehicles. An additional $5.5 million was reportedly used to make payments to existing investors in what the SEC described as a Ponzi-like operation.

As investor concerns increased, Fuller allegedly issued fabricated account statements showing fictional gains, referenced non-existent entities, and used artificial intelligence tools to create a fake auditor’s letter claiming investor accounts were under review and would eventually be transferred into a trust.

The SEC has charged Fuller with violating federal securities registration and anti-fraud laws. The agency is seeking permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and a prohibition on participating in future securities offerings.

The lawsuit follows a separate bankruptcy case in which the U.S. Department of Justice stated that Fuller was denied discharge of more than $12.5 million in debt after admitting that Privvy Investments operated as a Ponzi scheme and that he fabricated documents related to the business.