{"investigation":{"slug":"nathan-fuller-privvy-investments","entity_name":"Nathan Fuller / Privvy Investments","trust_score":0,"severity_base":null,"score_modifier":-5,"confidence":0.96,"status":"published","content_type":"investigation","summary":"Nathan Fuller, a Cypress, Texas resident, is the subject of a May 28, 2026 SEC civil complaint alleging he raised approximately $12.3 million from roughly 150 investors across nine U.S. states and two foreign countries through fabricated AI-powered crypto trading bots operated under Privvy Investments LLC and Gateway Digital Investments. The SEC alleges Fuller misappropriated at least $6.2 million for personal expenses and used approximately $5.5 million for Ponzi-like payments to earlier investors, while deploying only about $380,000 (3%) in actual cryptocurrency purchases. In a related proceeding, a Texas bankruptcy court denied Fuller a discharge of over $12.5 million in debt on August 1, 2025, after Fuller admitted to operating a Ponzi scheme and fabricating documents.","sections":[{"content":"The U.S. Securities and Exchange Commission filed a civil complaint against Nathan Fuller on May 28, 2026, in the U.S. District Court for the Southern District of Texas. The complaint charges Fuller with violating 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. The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil monetary penalties, and a ban on Fuller's participation in future securities offerings. As of the filing date, Fuller had not yet formally responded to the complaint in court.","heading":"SEC Enforcement Action","sources":[{"url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26558","name":"SEC Litigation Release LR-26558: Nathan Fuller","type":"regulatory","credibility":1},{"url":"https://www.securitiesdocket.com/2026/06/01/sec-charges-texas-resident-in-alleged-multi-million-dollar-crypto-asset-fraud-scheme/","name":"Securities Docket: SEC Charges Texas Resident in Alleged Multi-Million Dollar Crypto Asset Fraud Scheme","type":"news_article","credibility":2},{"url":"https://fxnewsgroup.com/forex-news/cryptocurrency/sec-brings-charges-against-owner-of-privvy-investments-in-connection-with-12-3m-crypto-scheme/","name":"FX News Group: SEC brings charges against owner of Privvy Investments","type":"news_article","credibility":2}],"severity":"critical"},{"content":"From at least October 2022 through mid-2024, Fuller allegedly offered and sold joint-venture interests in a purported crypto asset trading operation through Privvy Investments, LLC and under the assumed business name Gateway Digital Investments. Fuller marketed the scheme as an AI-powered arbitrage trading system, claiming proprietary bots would scan cryptocurrency exchanges to automatically exploit small price discrepancies through high-frequency trading. Investors were solicited through social media campaigns and aggressive referral programs. The scheme allegedly reached approximately 150 investors across nine U.S. states and two foreign countries, raising a total of approximately $12.3 million.","heading":"Scheme Overview and Operating Entities","sources":[{"url":"https://www.coindesk.com/business/2026/05/30/sec-sues-texas-man-over-usd12-3-million-alleged-crypto-scheme-built-on-fake-ai-trading-bots","name":"CoinDesk: SEC sues Texas man over $12.3 million alleged crypto scheme built on fake AI trading bots","type":"news_article","credibility":1},{"url":"https://www.investmentnews.com/regulation-legal-compliance/sec-sues-texas-man-over-alleged-123-million-ai-crypto-scheme/266827","name":"Investment News: SEC sues Texas man over alleged $12.3 million AI crypto scheme","type":"news_article","credibility":2},{"url":"https://www.cryptotimes.io/2026/05/30/sec-charges-texas-man-over-12-3m-ai-crypto-trading-fraud/","name":"Crypto Times: SEC Charges Texas Man Over $12.3M AI Crypto Trading Fraud","type":"news_article","credibility":2}],"severity":"critical"},{"content":"The SEC complaint alleges Fuller made a series of material misrepresentations to investors. Fuller allegedly promised returns of 40% to 50% within 30 to 45 days, and told some investors they could earn guaranteed profits exceeding 100% in as little as 21 days, with losses capped at 3%. Fuller also allegedly made false claims about regulatory and insurance protections, including: possession of a Texas money-transmitter license; a surety bond backing investor funds; FDIC insurance coverage; and professional liability insurance. The SEC further alleges Fuller altered a legitimate $2 million liability policy document to falsely show $5 million in professional-liability coverage that did not exist. A fabricated entity called \"Texas Guarantors & Securities\" was also allegedly referenced in investor communications to lend false legitimacy to the operation.","heading":"Fraudulent Promises and Misrepresentations","sources":[{"url":"https://www.investmentnews.com/regulation-legal-compliance/sec-sues-texas-man-over-alleged-123-million-ai-crypto-scheme/266827","name":"Investment News: SEC sues Texas man over alleged $12.3 million AI crypto scheme","type":"news_article","credibility":2},{"url":"https://www.cryptotimes.io/2026/05/30/sec-charges-texas-man-over-12-3m-ai-crypto-trading-fraud/","name":"Crypto Times: SEC Charges Texas Man Over $12.3M AI Crypto Trading Fraud","type":"news_article","credibility":2},{"url":"https://www.theblock.co/post/403118/sec-sues-privvy-founder-over-12-3-million-crypto-scheme-as-ai-bots-turn-out-to-be-neither","name":"The Block: SEC sues Privvy founder over $12.3 million crypto scheme","type":"news_article","credibility":1}],"severity":"critical"},{"content":"The SEC alleges that of the approximately $12.3 million raised, only about $380,000 (roughly 3%) was ever used to purchase cryptocurrency, and those limited trades were executed without the advertised AI bots and generated no profits. Fuller allegedly diverted at least $6.2 million for personal expenses, including the purchase of a home valued at approximately $1 million, gambling activities, collectible trading cards, travel, and a Jeep vehicle. Approximately $5.5 million was allegedly used to make Ponzi-like payments to earlier investors in order to sustain the appearance of a functioning investment operation. The combination of personal misappropriation, Ponzi payments, and negligible actual trading activity is consistent with a classic investment fraud structure.","heading":"Misappropriation of Investor Funds","sources":[{"url":"https://www.coindesk.com/business/2026/05/30/sec-sues-texas-man-over-usd12-3-million-alleged-crypto-scheme-built-on-fake-ai-trading-bots","name":"CoinDesk: SEC sues Texas man over $12.3 million alleged crypto scheme built on fake AI trading bots","type":"news_article","credibility":1},{"url":"https://www.cryptopolitan.com/privvy-investments-court-blocks-escape/","name":"Cryptopolitan: Privvy Investments customers win as court blocks $12.5M crypto Ponzi operator's escape","type":"news_article","credibility":2},{"url":"https://www.investmentnews.com/regulation-legal-compliance/sec-sues-texas-man-over-alleged-123-million-ai-crypto-scheme/266827","name":"Investment News: SEC sues Texas man over alleged $12.3 million AI crypto scheme","type":"news_article","credibility":2}],"severity":"critical"},{"content":"As investor withdrawal requests mounted in June 2024, Fuller allegedly undertook several steps to delay and obstruct investor recoveries. He allegedly created a shell company called Blockchain Audit Solutions and used ChatGPT to generate fraudulent letters to investors, falsely claiming that accounts were under audit and that investors must provide additional know-your-customer (KYC) verification before withdrawals could be processed. Fuller also allegedly created a phantom mobile application that displayed fabricated account balances, and distributed bogus account statements showing fictitious gains. The SEC complaint further alleges Fuller issued fabricated correspondence from non-existent entities to \"lull\" investors and prolong the scheme. These actions are alleged to have constituted additional acts of securities fraud.","heading":"Concealment and Cover-Up Tactics","sources":[{"url":"https://www.investmentnews.com/regulation-legal-compliance/sec-sues-texas-man-over-alleged-123-million-ai-crypto-scheme/266827","name":"Investment News: SEC sues Texas man over alleged $12.3 million AI crypto scheme","type":"news_article","credibility":2},{"url":"https://www.coindesk.com/business/2026/05/30/sec-sues-texas-man-over-usd12-3-million-alleged-crypto-scheme-built-on-fake-ai-trading-bots","name":"CoinDesk: SEC sues Texas man over $12.3 million alleged crypto scheme built on fake AI trading bots","type":"news_article","credibility":1},{"url":"https://fxnewsgroup.com/forex-news/cryptocurrency/sec-brings-charges-against-owner-of-privvy-investments-in-connection-with-12-3m-crypto-scheme/","name":"FX News Group: SEC brings charges against owner of Privvy Investments","type":"news_article","credibility":2}],"severity":"critical"},{"content":"Prior to the SEC action, victims of the alleged scheme filed a lawsuit in Texas state court against Fuller. As a result of that litigation, a receiver was appointed by the court to seize Fuller's assets. Following the receiver appointment, Fuller filed for personal bankruptcy protection in October 2024, seeking relief from the debts owed to defrauded investors.","heading":"State Court Litigation and Receiver Appointment","sources":[{"url":"https://www.cryptopolitan.com/privvy-investments-court-blocks-escape/","name":"Cryptopolitan: Privvy Investments customers win as court blocks $12.5M crypto Ponzi operator's escape","type":"news_article","credibility":2},{"url":"https://www.justice.gov/opa/pr/debtor-who-led-crypto-investment-scheme-denied-bankruptcy-discharge","name":"DOJ: Debtor Who Led Crypto Investment Scheme Denied Bankruptcy Discharge","type":"regulatory","credibility":1}],"severity":"high"},{"content":"On August 1, 2025, the Bankruptcy Court for the Southern District of Texas denied Fuller's petition to discharge over $12.5 million in unsecured debts. The court issued a default judgment after Fuller failed to respond to the U.S. Trustee Program's complaint objecting to his discharge. Fuller had admitted to operating Privvy Investments LLC as a Ponzi scheme, providing false testimony, falsifying bankruptcy documents, and hindering the Chapter 7 trustee's administration of the case. The court also found that Fuller had concealed assets and failed to maintain adequate financial records. Fuller was additionally held in civil contempt for failing to comply with court orders. U.S. Trustee Kevin Epstein stated: \"Fraudsters seeking to whitewash their schemes will not find sanctuary in bankruptcy.\" As a result of the ruling, Fuller remains personally liable for all debts owed to creditors, and creditors retain the right to pursue individual claims.","heading":"Bankruptcy Discharge Denied","sources":[{"url":"https://www.justice.gov/opa/pr/debtor-who-led-crypto-investment-scheme-denied-bankruptcy-discharge","name":"DOJ Office of Public Affairs: Debtor Who Led Crypto Investment Scheme Denied Bankruptcy Discharge","type":"regulatory","credibility":1},{"url":"https://www.cryptopolitan.com/privvy-investments-court-blocks-escape/","name":"Cryptopolitan: Privvy Investments customers win as court blocks $12.5M crypto Ponzi operator's escape","type":"news_article","credibility":2},{"url":"https://www.gaudencioadvogados.com/en/news/texas-ponzi-scheme-debtor-denied-12-5m-bankruptcy-protection-in-crypto-case/","name":"Gaudencio Advogados: Texas Ponzi Scheme Debtor Denied $12.5M Bankruptcy Protection","type":"news_article","credibility":3}],"severity":"critical"},{"content":"The case represents a documented instance of \"AI washing\" in the crypto investment space, in which a purported investment service falsely claimed to employ artificial intelligence technology to justify abnormal return promises. According to the SEC complaint, the AI trading bots advertised by Fuller did not exist as described; the approximately $380,000 in actual cryptocurrency purchases that did occur were made without any automated or AI-assisted system, and those trades generated no profits. Notably, Fuller allegedly used a genuine AI tool, ChatGPT, not to trade but to generate fraudulent audit letters intended to obstruct investor withdrawals, an inversion of the role attributed to AI in his investor marketing.","heading":"AI Washing and Technology Misrepresentation","sources":[{"url":"https://www.theblock.co/post/403118/sec-sues-privvy-founder-over-12-3-million-crypto-scheme-as-ai-bots-turn-out-to-be-neither","name":"The Block: SEC sues Privvy founder over $12.3 million crypto scheme as AI 'bots' turn out to be neither","type":"news_article","credibility":1},{"url":"https://www.coindesk.com/business/2026/05/30/sec-sues-texas-man-over-usd12-3-million-alleged-crypto-scheme-built-on-fake-ai-trading-bots","name":"CoinDesk: SEC sues Texas man over $12.3 million alleged crypto scheme built on fake AI trading bots","type":"news_article","credibility":1}],"severity":"high"}],"timeline":[{"date":"2022-10-01","event":"Fuller allegedly begins soliciting investors through Privvy Investments LLC and Gateway Digital Investments, promising AI-powered crypto arbitrage trading returns of 40-100%+.","source":"SEC Litigation Release LR-26558","source_url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26558"},{"date":"2024-06-01","event":"Investor withdrawal requests mount. Fuller allegedly forms shell company Blockchain Audit Solutions and uses ChatGPT to generate fraudulent KYC audit letters to delay withdrawals.","source":"Investment News","source_url":"https://www.investmentnews.com/regulation-legal-compliance/sec-sues-texas-man-over-alleged-123-million-ai-crypto-scheme/266827"},{"date":"2024-07-01","event":"Scheme collapses; investors sue Fuller in Texas state court. A receiver is appointed by the court to seize Fuller's assets.","source":"Cryptopolitan","source_url":"https://www.cryptopolitan.com/privvy-investments-court-blocks-escape/"},{"date":"2024-10-01","event":"Fuller files for personal bankruptcy protection under Chapter 7 in the Bankruptcy Court for the Southern District of Texas, seeking discharge of over $12.5 million in debt.","source":"DOJ Office of Public Affairs","source_url":"https://www.justice.gov/opa/pr/debtor-who-led-crypto-investment-scheme-denied-bankruptcy-discharge"},{"date":"2025-08-01","event":"Bankruptcy Court for the Southern District of Texas denies Fuller's discharge petition. Fuller admits to operating Privvy Investments as a Ponzi scheme, providing false testimony, and fabricating bankruptcy documents. Court also finds Fuller in civil contempt.","source":"DOJ Office of Public Affairs","source_url":"https://www.justice.gov/opa/pr/debtor-who-led-crypto-investment-scheme-denied-bankruptcy-discharge"},{"date":"2026-05-28","event":"SEC files civil complaint against Nathan Fuller in the U.S. District Court for the Southern District of Texas, charging violations of Securities Act Sections 5(a), 5(c), 17(a) and Exchange Act Section 10(b) / Rule 10b-5.","source":"SEC Litigation Release LR-26558","source_url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26558"},{"date":"2026-05-30","event":"CoinDesk, The Block, and other major crypto outlets report on the SEC charges.","source":"CoinDesk","source_url":"https://www.coindesk.com/business/2026/05/30/sec-sues-texas-man-over-usd12-3-million-alleged-crypto-scheme-built-on-fake-ai-trading-bots"}],"sources_used":[{"url":"https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26558","name":"SEC Litigation Release 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