SEC Targets Alleged AI Crypto Trading Scheme That Raised $12.3 Million

The U.S. Securities and Exchange Commission (SEC) has charged Texas resident Nathan Fuller over an alleged cryptocurrency investment fraud that raised approximately $12.3 million from around 150 investors through promises of AI-driven trading profits.

According to the SEC, Fuller marketed investment opportunities through Privvy Investments and Gateway Digital Investments between 2022 and 2024, claiming proprietary AI-powered trading bots could generate high-frequency arbitrage profits in cryptocurrency markets.

Investors were allegedly promised returns of 40% to 50% within 30 to 45 days, while some were told they could earn guaranteed profits exceeding 100% in as little as 21 days. Fuller also reportedly claimed investor funds were protected by insurance policies and other safeguards.

Regulators allege those representations were false. The SEC claims the purported AI trading system did not operate as advertised and that at least $6.2 million of investor funds was diverted for personal expenses. Another $5.5 million was allegedly used to make payments to existing investors, a structure regulators described as Ponzi-like.

The complaint further alleges that investors received fabricated account statements and fake correspondence intended to create the appearance of successful trading activity and substantial portfolio growth.

The case highlights a continuing trend of investment scams using artificial intelligence as a marketing tool to attract retail investors. Regulators have repeatedly warned that claims involving proprietary AI trading systems, guaranteed returns, or exceptionally high profits over short periods are common features in fraudulent investment schemes.

The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains, interest, and civil penalties against Fuller. The agency's action adds to a growing list of enforcement cases involving crypto investment programs that combined AI-related marketing claims with unrealistic return promises and misleading performance reporting.