SEC sues Texas man over alleged $12.3 million AI crypto scheme

Crypto. AI bots. Guaranteed profits. The SEC says it was all a lie that raised $12.3 million. 

On May 28, 2026, the Securities and Exchange Commission sued Nathan Fuller, a Cypress, Texas, man it says ran a crypto investment scheme through his company, Privvy Investments, LLC. The complaint, filed in federal court in Houston, says he raised about $12.3 million from roughly 150 investors across nine states and two foreign countries. 

The pitch was slick. According to the filing, Fuller told investors he had built proprietary AI trading bots that would run high-frequency arbitrage across crypto platforms - buy low on one, sell high on another, keep the difference. He promised guaranteed profits over 100% in as little as 21 days, the SEC says, with losses capped at 3% by built-in stop-loss code. 

The machinery did not work as advertised, the SEC alleges. The complaint says the bots had no stop-loss or AI functionality "to the extent they functioned at all," and that Fuller spent only about $380,000 - roughly 3% of the money raised - actually buying crypto. It made no profit. 

For advisors, the lesson is in how the trust got built. The SEC says Fuller told investors he held a Texas money-transmitter license, that a surety bond backed their money, and that their funds were guaranteed by the FDIC. None of it was real, the filing alleges. It says he pointed to an insurer, Texas Guarantors & Securities, that "was not a real company; Fuller made it up." And it says he took a genuine $2 million general-liability policy and altered the certificate to show $5 million in professional-liability cover that did not exist. 

The cover-up, as the SEC tells it, leaned on fakes. The complaint says Fuller built an app showing phantom balances, emailed bogus statements - one showing a gain above 334% - and invented "Digital Currency Capital Group," a name close to a real crypto firm. When investors tried to cash out, the filing says he created another fake entity, "Blockchain Audit Solutions," and used ChatGPT to write a phony letter claiming their accounts were under audit and needed "KYC verification." 

Where did the cash go? The SEC alleges Fuller "misappropriated" at least $6.2 million - a roughly $1 million house, gambling, trading cards, travel, a Jeep - and used about $5.5 million for "Ponzi-like payments" to other investors. 

The takeaway for any practice is one worth passing to clients. Guaranteed triple-digit returns, FDIC claims on a private deal, and unregistered "joint-venture" interests are warning signs. No registration statement was ever filed with the SEC or any state, the complaint says. 

The SEC charges Fuller with breaking the registration and antifraud rules of the Securities Act and Exchange Act. It is seeking permanent injunctions, the return of "ill-gotten gains" plus interest, and a civil penalty. 

These are allegations only. They have not been tested in court, Fuller has not filed a response, and no court has ruled.