SEC Charges Texas Man in $12.3 Million Fraudulent Crypto Scheme Involving Fake AI Trading Bots
SEC sues Texas man over $12.3 million alleged crypto scheme built on fake AI trading bots
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The SEC has filed a lawsuit against Nathan Fuller from Texas, alleging he defrauded 150 investors out of $12.3 million through a crypto scheme that falsely claimed to use AI trading bots. Only 3% of the funds were actually invested in cryptocurrency, with Fuller diverting millions for personal use and Ponzi-like payments.
- 01Nathan Fuller raised approximately $12.3 million from around 150 investors through misleading claims about AI-powered crypto trading bots.
- 02Only about $380,000 (3%) of the total funds was used for actual cryptocurrency purchases, with no involvement of AI bots.
- 03Fuller allegedly misappropriated $6.2 million for personal expenses, including luxury items and gambling, while using $5.5 million for Ponzi-like payments to earlier investors.
- 04The SEC's complaint includes charges of violating federal securities laws, seeking permanent injunctions and civil penalties against Fuller.
- 05Fuller had previously admitted to operating Privvy Investments as a Ponzi scheme in a bankruptcy proceeding, with over $12.5 million in debt.
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The U.S. Securities and Exchange Commission (SEC) has initiated legal action against Nathan Fuller, a Texas resident, for allegedly orchestrating a fraudulent cryptocurrency investment scheme that raised approximately $12.3 million from about 150 investors. Fuller purportedly claimed to operate AI-driven trading bots that could deliver returns of up to 100% within weeks. However, the SEC's complaint reveals that only 3% of the raised funds were actually invested in cryptocurrency, with Fuller misappropriating $6.2 million for personal expenses such as luxury purchases and gambling. Additionally, he used $5.5 million to make payments to earlier investors, resembling a Ponzi scheme. To maintain the illusion of profitability, Fuller allegedly fabricated account statements and used AI to generate misleading communications to investors. The SEC is seeking permanent injunctions, disgorgement, and civil penalties against Fuller, who had previously admitted to running a Ponzi scheme in a bankruptcy case, where he faced over $12.5 million in debt.
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The case highlights the risks associated with fraudulent investment schemes in the cryptocurrency space, potentially affecting investor confidence.
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