SEC Sues Privvy Founder Over $12.3M Fake AI Crypto Scheme

The Securities and Exchange Commission filed a civil complaint Thursday in federal court in Houston, accusing Nathan Fuller, founder of Privvy Investments LLC, of running a $12.3 million fraud that used false claims about AI trading bots to solicit investor funds.

The complaint alleges Fuller raised money from about 150 investors between October 2022 and mid-2024. Investors were located in nine U.S. states and two foreign countries. Fuller also did business under the name Gateway Digital Investments.

Fuller told investors Privvy used proprietary, AI-driven trading bots that autonomously scanned cryptocurrency platforms and executed high-frequency arbitrage. He promised returns of 40% to 50% in 30 to 45 days and, in some cases, guaranteed more than 100% in as few as 21 days, the complaint says.

The SEC alleges the bots did not operate as represented. Where code was run, it lacked artificial intelligence and had no stop-loss features. Fuller used about $380,000, roughly 3% of the funds raised, to buy crypto and generated no trading profit, the complaint states.

Instead, the SEC says Fuller misappropriated at least $6.2 million for personal expenses, including a house valued at about $1 million, gambling, collectible cards, travel and a Jeep. The complaint also alleges he routed about $5.5 million to earlier investors in Ponzi-like payments.

To address investor concerns, the complaint charges Fuller with making false claims and forging documents. He allegedly told investors Privvy held a Texas money-transmitter license and a surety bond, that investor funds were FDIC-insured, and that a professional-liability policy backed the business. The complaint alleges he invented an insurer called Texas Guarantors & Securities and altered a genuine biBERK certificate to show $5 million in coverage that the policy excluded.

The SEC describes Fuller using artificial intelligence tools as part of the cover-up. When investors sought withdrawals in June 2024, Fuller created a sham firm called Blockchain Audit Solutions and used ChatGPT to draft a letter saying accounts had been moved and required “KYC verification” before payouts could be made, the complaint alleges.

Fuller has faced prior court action related to Privvy. A Texas bankruptcy court in September denied him a discharge of more than $12.5 million in debt after he admitted, according to the Department of Justice, to operating Privvy as a Ponzi scheme and fabricating documents. Fuller filed for Chapter 7 bankruptcy in October 2024 after investors sued and a receiver seized his assets. The SEC's complaint does not reference that bankruptcy judgment.

The SEC charged Fuller with violating the registration and antifraud provisions of the Securities Act and the Exchange Act. The agency is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties and an order barring Fuller from participating in securities offerings.

The complaint was supported by the SEC's Cyber and Emerging Technologies Unit, launched in early 2025 to pursue frauds that feature technology claims. The unit has brought enforcement actions involving schemes that promoted AI-branded trading platforms and networks of fake crypto platforms.