SEC Charges Texas Man With $12.3M Crypto Fraud Scheme Using Fake AI Trading Bots

The Securities and Exchange Commission (SEC) has taken action against a Texas resident accused of running a cryptocurrency fraud scheme that leveraged fake AI trading bots to deceive investors.

Nathan Fuller, a resident of Cypress, Texas, allegedly operated the scheme through his company Privvy Investments, LLC, and under the assumed business name Gateway Digital Investments between at least October 2022 and mid-2024. The SEC alleges that Fuller promised investors guaranteed returns of 40% to 50% within 30 to 45 days, with some told they could make profits exceeding 100% in as little as 21 days.

The scam centered around proprietary AI-based trading bots claimed to conduct high-frequency arbitrage trading across crypto platforms. However, the SEC alleges that Fuller's bots did not function as represented. Approximately half of the $12.3 million raised was misappropriated for personal expenses, with the remainder used to make Ponzi-like payments to earlier investors.

The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties in connection with the alleged scheme.