SEC Charges Texas Man in $12.3M Crypto Scam Involving Fake AI Bots

The SEC has charged Texas resident Nathan Fuller with operating a $12.3 million crypto fraud that raised money from roughly 150 investors on false claims of AI-powered trading bots . Through Privvy Investments LLC and the assumed name Gateway Digital Investments, Fuller sold passive joint-venture interests in a purported crypto arbitrage operation from October 2022 through mid-2024.

Fuller told investors that proprietary AI bots could scan crypto markets and execute high-frequency arbitrage trades with stop-loss protection, promising returns of 40% to 50% within 30 to 45 days and, in some cases, exceeding 100% in under a month, all backed by fictitious insurance and bond guarantees . The SEC alleges only about 3% of investor money ever reached crypto trading: Fuller diverted roughly $6.2 million for personal use, including a home, gambling, travel and vehicles, and used about $5.5 million for Ponzi-like payments to earlier investors.

As redemption requests mounted, the complaint says Fuller fabricated account statements showing fake gains and used AI to generate a letter from a fictitious auditing firm claiming accounts were under review. The SEC charged him with violating the registration and antifraud provisions of federal securities law and is seeking injunctions, disgorgement, civil penalties and a securities-offering ban. The case underscores intensifying regulatory scrutiny of AI-branded crypto ventures, a recurring pattern as 'AI' marketing continues to attract retail capital.