The US Securities and Exchange Commission (SEC) has charged a Texas resident with misappropriating $12.3 million from nearly 150 investors. Nathan Fuller orchestrated a major fraud scheme through his companies, Privvy Investments and Gateway Digital Investments, promising guaranteed returns using AI-based trading bots. This is reported by Cointelegraph.com reporting .
According to the SEC, Fuller promised investors returns of 40% to 50% within 30-45 days, and in some cases, over 100% in just 21 days. He claimed his AI bots executed high-frequency arbitrage trades on various crypto platforms. He also misled people by falsely claiming that funds were FDIC-insured.
In reality, at least $6.2 million of the $12.3 million collected was spent by Fuller on personal expenses. The remaining $5.5 million was used in a Ponzi scheme, where payments to old investors were made using funds from new ones. To conceal the scheme, fake reports and fabricated documents were provided to investors.
This case is part of a growing trend of crimes committed under the guise of AI and crypto technologies. Last year, the SEC uncovered a similar $14 million fraud scheme. The regulator is currently seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties against Fuller.
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