SEC Charges Cypress, Texas Entrepreneur in $12.3 Million AI Crypto Trading Bot Scam
On May 28, 2026, the Securities and Exchange Commission (SEC) filed a civil complaint in the U.S. District Court for the Southern District of Texas against Nathan Fuller of Cypress, Texas, and his company, Privvy Investments. The SEC accused Fuller of orchestrating a digital asset investment fraud scheme that raised approximately $12.3 million from 150 passive investors between October 2022 and mid-2024.
Fuller induced investors to sign joint venture agreements by making false and misleading statements, including promises of 40-50% returns in 30 to 45 days and guaranteed profits exceeding 100% in 21 days. To appease skeptical investors, Fuller falsely claimed that he held a money-transmitter license, that investor funds were secured by a surety bond, and that investments were insured by the Federal Deposit Insurance Corporation (FDIC).
A core element of the pitch was that Privvy Investments utilized proprietary "AI-based trading bots" to execute automated, high-frequency arbitrage trading on digital asset platforms. However, the SEC alleged that the AI bots were entirely fabricated. To the extent any code existed at all, it had no stop-loss or artificial intelligence capabilities. Furthermore, Fuller diverted the vast majority of investor funds, using only $380,000 (about 3%) to trade digital assets manually (generating no profit). He misappropriated at least $6.2 million for luxury personal expenses—including a $1 million home, gambling, trading cards, a Jeep, and travel—and used $5.5 million of investor funds to make Ponzi-like payments to sustain the scheme.
The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
"Another of Fuller’s promises was that his company would use proprietary AI-based trading bots to engage in high-frequency arbitrage trading on digital asset trading platforms. However, the SEC alleged that Fuller’s bots did not function as represented, arguing that “to the extent they functioned at all, their code did not include stop-loss or AI functionality.”" — SEC Complaint details, CoinGeek