SEC Charges Texas Man in $12.3 Million Crypto Fraud Linked to Fake AI Trading Bots

The U.S. SEC has charged Texas resident Nathan Fuller for allegedly running a crypto fraud scheme that collected around $12.3 million from nearly 150 investors through false promises of profits generated by artificial intelligence trading bots.

According to the SEC complaint, Fuller operated through Privvy Investments, LLC and under the business name Gateway Digital Investments between October 2022 and mid-2024. Authorities said he convinced investors to hand over money by promising unusually high and guaranteed returns in a short period.

The SEC alleges Fuller told investors they could earn profits between 40% and 50% within 30 to 45 days. Some were even promised returns above 100% in as little as 21 days.

Fake AI Trading Bots Used to Attract Investors

To gain trust, Fuller allegedly claimed investor money was protected by a surety bond, insured by the FDIC, and backed by professional liability insurance. Investigators say those claims were completely false.

At the center of the operation were so-called AI-powered trading bots that Fuller claimed performed high frequency arbitrage trading across crypto exchanges. However, the SEC said the bots did not work as described and were largely part of a misleading sales pitch.

Millions Allegedly Used for Personal Spending

Of the $12.3 million raised, regulators claim Fuller misused at least $6.2 million for personal expenses. Another $5.5 million was allegedly used to pay earlier investors in what authorities described as Ponzi-like payments to maintain trust and attract more funds.

The SEC also accused Fuller of sending fake account statements and fabricated messages from non-existent companies to keep investors convinced their money was growing.

SEC Expands Crackdown on Crypto and AI Fraud

The regulator is seeking permanent injunctions, repayment of alleged illegal gains, and civil penalties against Fuller.

The case comes as regulators increase scrutiny on crypto projects using artificial intelligence marketing claims. Last year, the SEC pursued several firms in a separate $14 million scheme where fraudsters used AI branding and fake financial advice to attract retail investors through messaging groups.

Separately, the SEC recently charged crypto executive Donald Basile in an alleged $16 million crypto related fundraising scheme tied to the Bitcoin Latinum token.