Key Takeaways
- • The SEC charged Nathan Fuller, founder of Privvy Investments LLC, with operating a $12.3 million crypto fraud scheme that raised capital from approximately 150 investors across nine states and two foreign countries between October 2022 and mid-2024.
- • Fuller promised investors 40–50% returns within 30–45 days (and up to 100% guaranteed returns in as little as 21 days) through fake AI-powered trading bots claiming to execute high-frequency arbitrage on crypto platforms; the bots contained no functional AI or stop-loss mechanisms.
- • Only approximately $380,000 (3% of funds raised) was actually deployed to purchase cryptocurrency, generating no profit; Fuller misappropriated at least $6.2 million for personal expenses including a house purchase, gambling, trading cards, and travel.
- • Fuller routed approximately $5.5 million back to earlier investors in Ponzi-like payment structures to quiet concerns and maintain the scheme's appearance of legitimacy.
- • The scheme involved multiple false claims including fabricated FDIC insurance coverage, a non-existent Texas money-transmitter license, a fake surety bond, and a forged professional-liability insurance certificate from an invented insurer called Texas Guarantors & Securities.
Summary
The Securities and Exchange Commission has charged Nathan Fuller, a Texas resident and founder of Privvy Investments LLC (also operating as Gateway Digital Investments), with orchestrating a $12.3 million cryptocurrency fraud scheme centered on deceptive AI marketing. The complaint, filed in federal court in Houston on May 30, 2026, alleges Fuller deceived approximately 150 investors across nine states and two foreign countries from October 2022 through mid-2024.
Fuller's core deception involved selling access to proprietary AI-based trading bots purportedly capable of autonomously identifying and exploiting micro-arbitrage opportunities across cryptocurrency platforms through high-frequency trading. Marketing materials promised extraordinarily high returns—40% to 50% within 30 to 45 days, with some investors solicited with guarantees of 100% returns in as little as 21 days. In reality, the code either did not function as designed or contained no AI capabilities or risk-management features whatsoever. The SEC's investigation determined that merely $380,000 of the $12.3 million raised—approximately 3%—was actually deployed to purchase cryptocurrency, and that deployment generated no profit.
Rather than operating as an investment vehicle, the scheme operated as a Ponzi structure. Fuller misappropriated at least $6.2 million for personal consumption, including a house purchase, gambling losses, trading card acquisitions, and travel expenses. To sustain investor confidence and forestall redemption requests, Fuller routed approximately $5.5 million to earlier investors as purported returns, creating the illusion of a functioning investment operation while the funds were depleted through personal use and unsustainable payout cycles.
The scheme's infrastructure relied on multiple layers of fraudulent documentation. Fuller falsely represented that he held a Texas money-transmitter license, maintained a surety bond protecting investor funds, and that deposits were FDIC-insured. Most significantly, he fabricated insurance coverage by inventing a non-existent insurer called Texas Guarantors & Securities and altered a genuine but expired biBERK insurance certificate to show $5 million in professional-liability coverage—coverage the actual policy explicitly excluded. The SEC alleges Fuller violated federal securities registration and antifraud provisions and is seeking permanent injunctive relief and disgorgement of ill-gotten gains.
The case underscores persistent regulatory concerns regarding the exploitation of emerging technology narratives (particularly AI) to market unregistered securities and Ponzi schemes to retail investors. It reflects the SEC's intensified focus on crypto-related fraud schemes that leverage technological claims to justify implausible return promises.
Fuller's core deception involved selling access to proprietary AI-based trading bots purportedly capable of autonomously identifying and exploiting micro-arbitrage opportunities across cryptocurrency platforms through high-frequency trading. Marketing materials promised extraordinarily high returns—40% to 50% within 30 to 45 days, with some investors solicited with guarantees of 100% returns in as little as 21 days. In reality, the code either did not function as designed or contained no AI capabilities or risk-management features whatsoever. The SEC's investigation determined that merely $380,000 of the $12.3 million raised—approximately 3%—was actually deployed to purchase cryptocurrency, and that deployment generated no profit.
Rather than operating as an investment vehicle, the scheme operated as a Ponzi structure. Fuller misappropriated at least $6.2 million for personal consumption, including a house purchase, gambling losses, trading card acquisitions, and travel expenses. To sustain investor confidence and forestall redemption requests, Fuller routed approximately $5.5 million to earlier investors as purported returns, creating the illusion of a functioning investment operation while the funds were depleted through personal use and unsustainable payout cycles.
The scheme's infrastructure relied on multiple layers of fraudulent documentation. Fuller falsely represented that he held a Texas money-transmitter license, maintained a surety bond protecting investor funds, and that deposits were FDIC-insured. Most significantly, he fabricated insurance coverage by inventing a non-existent insurer called Texas Guarantors & Securities and altered a genuine but expired biBERK insurance certificate to show $5 million in professional-liability coverage—coverage the actual policy explicitly excluded. The SEC alleges Fuller violated federal securities registration and antifraud provisions and is seeking permanent injunctive relief and disgorgement of ill-gotten gains.
The case underscores persistent regulatory concerns regarding the exploitation of emerging technology narratives (particularly AI) to market unregistered securities and Ponzi schemes to retail investors. It reflects the SEC's intensified focus on crypto-related fraud schemes that leverage technological claims to justify implausible return promises.
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