The U.S. Securities and Exchange Commission (SEC) has filed formal charges against a Texas resident for allegedly staging a cryptocurrency investment fraud that raised approximately $12.3 million from around 150 investors through false promises of AI-powered crypto trading and guaranteed returns.
According to the SEC report, Nathan Fuller, a resident of Cypress, Texas, offered and sold investment interests through his company, Privvy Investments LLC, which operated under the names Privvy Investments and Gateway Digital Investments. The SEC has filed a federal complaint filed on May 28, 2026, in the U.S. District Court for the Southern District of Texas,
The regulator alleges that between October 2022 and mid-2024, Fuller marketed the scheme as a sophisticated crypto trading operation powered by proprietary artificial intelligence technology capable of generating consistent profits through high-frequency arbitrage trading across digital asset markets.
Promises of massive returns in weeks
According to the SEC, Fuller solicited investors using aggressive referral programs and social media campaigns, promising extraordinary returns in remarkably short timeframes.
The regulator alleges that some investors were told they could earn returns of 40% to 50% within 30 to 45 days, while others were allegedly promised guaranteed profits exceeding 100% in as little as 21 days.
To override investor skepticism, Fuller allegedly fabricated multiple institutional safety nets. The complaint states he falsely claimed to hold a Texas money-transmitter license, and assured backers their capital was protected by surety bonds, professional liability insurance, and Federal Deposit Insurance Corporation (FDIC) backing—none of which applied to his operation.
AI trading bots allegedly did not operate
SEC investigators claim the trading operation was not functioning as represented.The AI-powered trading bots Fuller promoted either did not exist or failed to operate in the manner described to investors. Regulators allege that several statements regarding the trading strategy, fund protection mechanisms, and risk controls were materially false.
The SEC further claims that instead of using investor funds primarily for crypto trading activities, Fuller diverted large portions of the capital elsewhere.
SEC alleges ponzi-like payments and spending
The complaint alleges Fuller misappropriated at least $6.2 million of investor funds for personal expenses. Additionally, the SEC claims that approximately $5.5 million was used to make payments to earlier investors, describing the transactions as Ponzi-like payments designed to maintain confidence in the investment program.
According to regulators, these payments helped create the appearance of a profitable and functioning business while concealing the actual financial condition of the operation.
The SEC also alleges Fuller attempted to prevent investors from discovering the scheme by distributing fake account statements and fabricated correspondence from non-existent entities.
According to the complaint, these documents falsely portrayed successful trading activity and reassured investors that their funds remained secure and profitable.
The regulator stated that Fuller used the misleading records to “lull investors” and prolong the scheme despite growing financial problems.
Crypto fraud cases continue to rise
The SEC’s latest enforcement action comes amid a growing number of crypto-related fraud investigations in the United States and globally.
Similar cases have surfaced across the industry. In April 2026, a Texas man received a 23-year prison sentence for a $20 million cryptocurrency fraud scheme after prosecutors alleged he falsely claimed his token was backed by $44 billion in gold and $1 billion in fine art to attract investors.
Another high-profile case emerged the same month when Texas authorities arrested an Indian-origin Gujarat native in connection with an alleged crypto-to-gold scam. Investigators accused Patel of participating in a scheme involving approximately ₹20 lakh in investor losses and a planned ₹2.8 crore gold pickup.
The cases underscore how fraudsters continue using buzzwords such as artificial intelligence, asset-backed tokens, guaranteed returns, and alternative investment opportunities to lure investors into fraudulent schemes.
SEC seeks penalties and investor recovery
The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest, and civil monetary penalties.
As regulatory scrutiny intensifies, the case serves as another reminder of the risks associated with investment opportunities that promise unusually high returns while relying on unverifiable trading strategies or technological claims.
Also read: Indian Techie Scammed of ₹2.9 Crore via Fake Crypto App
