Who is Nathan Fuller? Texas man accused of running $12.3 million AI crypto scam

The US Securities and Exchange Commission (SEC) said Nathan Fuller, a resident of Cypress, Texas, collected about $12.3 million from roughly 150 investors between October 2022 and mid-2024, reported The Block. According to a complaint filed in federal court in Houston on Thursday, Fuller operated through Privvy Investments LLC and also used the business name Gateway Digital Investments.

The SEC alleged that Fuller attracted investors by claiming he had developed advanced AI-driven trading bots that could automatically identify and exploit small price differences across cryptocurrency exchanges. He told investors the system could generate returns of 40% to 50% within 30 to 45 days, reported The Block. Some investors were allegedly promised profits of more than 100% in as little as 21 days.

According to the SEC, those promises had no real basis. The regulator said the software did not contain the artificial intelligence capabilities Fuller described to investors. The complaint also alleged that the trading system lacked basic risk-management tools, including stop-loss protections that could limit losses during market swings.

The SEC said Fuller used only about $380,000 of investor money, roughly 3% of the funds he raised, to purchase cryptocurrency, reported The Block. Those trades did not produce any profits.

Instead, regulators alleged that Fuller diverted millions of dollars for personal spending. The SEC said he misappropriated at least $6.2 million and spent the money on a house worth about $1 million, gambling activities, trading cards, travel expenses and a Jeep.

The complaint further alleged that Fuller used about $5.5 million of new investor funds to make payments to earlier investors, reported The Block. Regulators described those transactions as Ponzi-like payments designed to create the appearance of a successful investment business.

How did Fuller convince investors to trust scheme?

According to the SEC, Fuller made a series of false claims to reassure investors and encourage additional investments.

The agency alleged that he told investors his business held a Texas money-transmitter license and maintained a surety bond, reported The Block. He also claimed that investor funds were protected by Federal Deposit Insurance Corporation (FDIC) coverage and backed by professional-liability insurance.

The SEC said none of those claims were true. Regulators alleged that Fuller created a fake insurance company called Texas Guarantors & Securities. 

The complaint also accused him of altering a legitimate insurance certificate issued by biBERK to make it appear that Privvy Investments carried $5 million in professional-liability coverage, reported The Block. According to the SEC, the actual policy specifically excluded the type of coverage Fuller claimed to possess.

The SEC said these false statements helped Fuller maintain investor confidence even as questions about withdrawals and returns increased.

What role did ChatGPT play in alleged cover-up?

The SEC’s complaint described an unusual use of artificial intelligence during the final stages of the scheme. As investors began requesting withdrawals in June 2024, Fuller allegedly created a fake company called Blockchain Audit Solutions, reported The Block. The SEC said he then used ChatGPT to help draft a letter sent to investors.

According to the complaint, the letter falsely informed investors that their accounts had been transferred and that they needed to complete KYC verification procedures before receiving any funds. Regulators said the letter was designed to delay withdrawals and calm growing concerns among investors who were trying to recover their money.

The SEC’s filing stated that the communication gave investors the impression that an independent audit or review process was taking place, even though the company behind the letter did not actually exist.

The civil fraud case comes after earlier legal problems involving Privvy Investments.

In September 2025, a Texas bankruptcy court denied Fuller a discharge of more than $12.5 million in debt, reported The Block. According to information previously released by the US Department of Justice, Fuller admitted during bankruptcy proceedings that he operated Privvy Investments as a Ponzi scheme and fabricated documents connected to the business.

Fuller filed for Chapter 7 bankruptcy in October 2024 after investors filed lawsuits against him in Texas state court and a court-appointed receiver took control of his assets, reported The Block.

The SEC’s latest complaint does not mention the bankruptcy court’s ruling or Fuller’s earlier admission.

The investigation received assistance from the SEC’s Cyber and Emerging Technologies Unit, a specialized enforcement group created in early 2025 to focus on misconduct involving emerging technologies.

The unit has pursued several high-profile cases involving investment schemes that relied on artificial intelligence marketing claims. Among them was a case against PGI Global founder Ramil Palafox, whom regulators accused of operating a $198 million fraud linked to a purported AI-powered trading platform, reported The Block.

The SEC has also targeted other alleged crypto scams that used AI-related branding to attract investors. In December, the agency filed charges against operators of several fake cryptocurrency platforms and so-called AI investment clubs that allegedly defrauded investors of about $14 million, reported The Block.

The SEC charged Fuller with violating federal securities registration and anti-fraud laws. The agency is seeking permanent injunctions, financial penalties, repayment of allegedly ill-gotten gains with interest, and an order barring him from participating in future securities offerings.

“To the extent the code operated at all, it had no AI functionality and generated no profits,” the SEC alleged in its complaint, according to The Block report.

The regulator also alleged that Fuller falsely represented key protections to investors, including insurance coverage and regulatory approvals that did not exist.