SEC Charges Texas Man With $12.3M Alleged Fake AI Crypto Fraud

The U.S. Securities and Exchange Commission has filed suit against Nathan Fuller, a resident of Cypress, Texas, alleging he raised roughly $12.3 million from about 150 investors through a crypto trading scheme premised on purported AI-driven trading bots. The complaint, filed May 28, 2026 in the U.S. District Court for the Southern District of Texas, accuses Fuller of multiple misrepresentations to investors.

According to the SEC’s complaint, Fuller marketed investment opportunities through Privvy Investments, LLC and related business names from at least October 2022 through mid-2024, promising returns of 40–50% within 30–45 days and guarantees exceeding 100% in as little as 21 days. The complaint alleges Fuller falsely claimed investor funds were secured by a surety bond, insured by the Federal Deposit Insurance Corporation (FDIC), and protected by professional‑liability insurance, while his alleged AI bots did not perform as represented. The SEC further alleges Fuller misappropriated at least $6.2 million for personal use and used about $5.5 million to make Ponzi‑like payments to earlier investors.

Immediate market reaction to the filing was not widely reported in major price feeds, yet the enforcement action underscores ongoing regulatory scrutiny of crypto offerings that invoke artificial intelligence and guaranteed returns. Market participants and service providers have grown increasingly wary of marketing that touts automated AI performance without transparent audits or verifiable track records, a concern highlighted in contemporaneous coverage.

The SEC’s complaint charges violations of 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 agency seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties. The enforcement effort was led by staff in the SEC’s Fort Worth Regional Office with assistance from the Division of Enforcement’s Cyber and Emerging Technologies Unit.

Legal observers say the case may signal continued aggressive SEC enforcement against schemes that conflate marketing claims of AI capability with investment products, particularly where investor protections are alleged to be fabricated. If the court sustains the SEC’s claims, the outcome could influence disclosure expectations and due‑diligence standards for firms and individuals marketing algorithmic trading services. Investors should demand verifiable proof of trading activity, custodial arrangements and independent attestations before allocating capital to similar propositions.