SEC Charges Privvy Founder Nathan Fuller Over $12.3M “AI Bot” Crypto Ponzi Scheme
The SEC sues Privvy Investments founder Nathan Fuller over an alleged $12.3M crypto fraud scheme using fake AI bots...
Quick overview
- The SEC filed a civil complaint against Nathan Fuller for allegedly operating a $12.3 million Ponzi scheme affecting over 150 victims across multiple states and countries.
- Fuller falsely claimed to offer investors access to non-existent AI-based trading algorithms, promising unrealistic returns of 40-50% within 30 to 45 days.
- The complaint alleges that Fuller misappropriated at least $6.2 million for personal expenses and used $5.5 million to pay earlier investors to maintain the scheme's appearance.
- This case highlights the SEC's ongoing efforts to combat AI-branded crypto investment scams, emphasizing the need for investor caution in the crypto space.
On May 29, 2026, the Securities and Exchange Commission filed a civil complaint against Nathan Fuller, an operator also known as Gateway Digital Investments, the alleged operator of a $12.3 million Ponzi scheme that allegedly affected more than 150 victims in nine U.S. states and two other countries.
According to the SEC, Fuller falsely solicited investments from October 2022 until at least mid-2024, by claiming that his companies were offering investors access to “proprietary algorithms” or so-called “AI-based bots” that allegedly were trading on crypto exchanges for investors by engaging in high-frequency arbitrage trading, with promised returns of 40-50% in 30 to 45 days; investors were also allegedly told that returns in excess of 100% were possible in as little as 21 days. The complaint alleges that the “AI bots” allegedly did not, in fact, exist.
Key Allegations
About $380,000, which was only approximately 3% of the total amount raised, was allegedly used to purchase some crypto, with which Fuller allegedly did not generate significant profits.
According to the SEC, the agency alleges that Fuller instead used at least $6.2 million of the alleged raised funds for his own personal use, allegedly for a ~$1M house, gambling, trading cards, travel, and a Jeep. The SEC further alleges that Fuller used approximately another $5.5M of the raised money to make payments to earlier investors in order to maintain the appearance of profitability.
Fuller also allegedly made various other false statements in the course of the scheme, including that his company held a Texas money transmitter license, that investors funds were FDIC insured, and that a professional liability policy insured investor funds; Fuller allegedly fabricated an insurer named Texas Guarantors & Securities and altered insurance documents to make it appear that they were related to his business.
According to the complaint, when investors attempted to withdraw their money in June 2024, Fuller allegedly formed a shell company called Blockchain Audit Solutions to issue letters generated by ChatGPT that told investors that they must provide additional “know-your customer” (KYC) verification before they could receive their withdrawal requests.
Prior Bankruptcy Admission
In September 2025, a Texas bankruptcy court denied Fuller a discharge of over $12.5 million in debt after Fuller “admitted” that he operated his firm, Privvy Investments LLC as a Ponzi scheme and that he “faked a large portion” of documents the bankruptcy court asked him to provide.
Broader Context
The case is the latest in a series of SEC actions targeting AI-branded crypto investment scams. The agency’s Cyber and Emerging Technologies Unit has pursued several similar schemes promising guaranteed returns through artificial intelligence.
The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties, and a bar preventing Fuller from participating in securities offerings.
Bottom Line
The SEC has been active in pursuing several other similar schemes that have been branded as being driven by Artificial Intelligence. The SEC’s Cyber and Emerging Technologies Unit is seeking a permanent injunction barring Fuller from participating in securities offerings, plus the disgorgement of any ill-gotten gains, with prejudgment interest, and civil penalties.
As we have noted numerous times before, the crypto space is rife with frauds and this lawsuit against Fuller is yet another example of fraudsters using the hype of new technologies like Artificial Intelligence to solicit investments. Investors beware: a tiny percentage of what investors paid actually went to actual crypto trading, with the bulk of it being used to support a Ponzi scheme.
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