The US Securities and Exchange Commission (SEC) has filed a civil complaint against Nathan Fuller, a Texas resident, alleging he ran an approximately $12.3 million crypto asset fraud scheme.
According to the SEC, Fuller claimed to use proprietary AI trading bots to generate high-frequency arbitrage profits, selling joint-venture interests in a low-risk crypto trading strategy powered by AI to around 150 investors.
The SEC alleges that Fuller promised investors returns of 40% to 50% within 30 to 45 days and guaranteed profits of over 100% in as little as 21 days. However, the agency claims that only about $380,000, or roughly 3% of the money raised, was actually used to buy crypto assets.
Fuller allegedly fabricated investor protections, claiming that investor funds were backed by a surety bond, FDIC insurance, a money-transmitter license and professional-liability coverage. The SEC also alleges he sent fake account statements and fabricated correspondence from sham entities.