The SEC charged a Cypress, Texas resident with running a $12.3 million crypto fraud scheme that leaned on fake AI trading bots, in a complaint filed Thursday in federal court in Houston.
Nathan Fuller, the founder and sole member of Privvy Investments LLC, raised the money from about 150 investors across nine states and two foreign countries between October 2022 and mid-2024, the agency said. He also did business under the assumed name Gateway Digital Investments.
Fuller told investors that proprietary AI-based bots autonomously scanned crypto trading platforms to capture small price gaps through high-frequency arbitrage, promising returns of 40% to 50% within 30 to 45 days, according to the SEC. Some were told they could earn guaranteed profits topping 100% in as little as 21 days.
The bots did not work as advertised. To the extent the code ran at all, it carried no AI or stop-loss functionality, and Fuller used only about $380,000, roughly 3% of the funds raised, to actually buy crypto, generating no profit, the complaint says.
Instead, the SEC alleges, Fuller misappropriated at least $6.2 million on a roughly $1 million house, gambling, trading cards, travel and a Jeep, and routed about $5.5 million back to earlier investors in Ponzi-like payments.
