The U.S. Securities and Exchange Commission (SEC) is charging Texas resident Nathan Fuller with running a multi-million dollar crypto investment fraud scheme. The case, filed in the US Southern District of TexasSeeks multiple penalties against the defendant for allegedly defrauding 150 victims.
In a press release on May 28, the SEC said that Fuller had advertised and sold interests in a joint venture crypto trading scheme under the company Privy Investments LLC, which was associated with the business names Privy Investments and Gateway Digital Investments. The Cypriot man reportedly promised some investors profits of 40%-50% within 30 days, and others a ridiculously audacious return of 100% in 21 days.
The Commission reported that Nathan Fuller had lured unsuspecting victims of his fraudulent scheme with a business model centered on AI-based trading bots that carried out high-frequency arbitrage trading on multiple crypto exchanges. In addition, the insurance promises included a surety bond, a professional liability insurance policy, and clearance from the Federal Deposit Insurance Corporation.
150 investors defrauded in classic crypto Ponzi scheme
According to the SEC report, Fuller’s crypto asset investment fraud ran from October 2022 to mid-2024. During this period, the defendants raised $12.3 million from 150 investors. Despite the promise of huge profits from AI-enabled trading bots, the SEC’s investigation revealed that Fuller had grossly misappropriated investors’ funds for two primary purposes.
First, the Texas resident spent $6.2 million on personal expenses, including luxury items, gambling tours and a nearly $1 million home for his ex-wife. Meanwhile, Fuller also invested $5.5 million in making Ponzi-like payments, creating the illusion of a functional trading scheme to attract more investors.
Fuller has been charged with violations Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.Which covers unlawful offering and selling of unregistered securities as well as fraudulent and deceptive practices in connection with the buying or selling of securities.
The commission is pushing for a number of penalties against Fuller, including Permanent Injunctive relief, compensating ill-gotten gains with interest, and imposing civil monetary penalties.
crypto market overview
At the time of writing, the total crypto market cap is $2.48 trillion, which represents a decline of approximately 9% from last week. This market loss comes amid widespread bearish sentiment in Bitcoin and other crypto assets.
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