The SEC has initiated legal action against Nathan Fuller, a Texas resident, alleging he amassed approximately $12.3 million from around 150 investors through a deceptive crypto investment scheme that falsely claimed to utilize AI-driven trading bots, promising guaranteed returns and insurance protections. A complaint lodged in the U.S. District Court for the Southern District of Texas reveals that Fuller operated under Privvy Investments LLC and the assumed business names Privvy Investments and Gateway Digital Investments. The SEC asserts that he marketed passive joint-venture interests in a supposed crypto arbitrage trading venture from at least October 2022 through mid-2024. According to the agency, Fuller assured investors that proprietary AI-based trading bots could analyze crypto markets, perform high-frequency arbitrage trades, and minimize losses through stop-loss mechanisms. Investors were allegedly promised returns ranging from 40% to 50% within 30 to 45 days, and in some instances, returns exceeding 100% within a month. However, the SEC contends that these claims were misleading. The complaint indicates that only about $380,000, or approximately 3% of investor funds, was utilized to acquire cryptocurrency without the involvement of the purported bots. These trades, conducted without the advertised bots, yielded no profits. Instead, Fuller allegedly misappropriated at least $6.2 million for personal expenditures, including buying a home, gambling, travel, and vehicles, while using around $5.5 million to make “Ponzi-like payments” to investors. As concerns over withdrawals escalated, Fuller reportedly fabricated account statements indicating gains, referenced non-existent entities, and generated a letter using artificial intelligence from a supposed auditing firm claiming that investor accounts were under review and would eventually be liquidated into a trust. The SEC has charged Fuller with breaching registration and anti-fraud regulations of federal securities laws, seeking permanent injunctions, disgorgement, civil penalties, and a prohibition on participating in securities offerings. This case follows a separate bankruptcy proceeding in which the Justice Department stated that Fuller was denied discharge of over $12.5 million in debt after admitting to operating Privvy as a Ponzi scheme and fabricating documents, according to court records cited by the DOJ.