SEC sues Texas man over $12.3 million alleged crypto scheme built on fake AI trading bots
Fuller allegedly diverted $6.2 million for personal use and $5.5M for Ponzi-like payments; only 3% of funds went to crypto trading.
What to know:
- Texas man Nathan Fuller allegedly raised $12.3 million from 150 investors via a false AI crypto bot scheme promising up to 100% returns.
- Fuller allegedly diverted $6.2 million for personal use and $5.5M for Ponzi-like payments; only 3% of funds went to crypto trading.
- To cover losses, Fuller used fabricated statements and an AI-generated letter to fraudulently reassure investors.
The SEC says he sold passive joint-venture interests in a purported crypto arbitrage trading operation from at least October 2022 through mid-2024.
The agency claims that Fuller told investors that proprietary AI-based trading bots could scan crypto markets, execute high-frequency arbitrage trades and limit losses through stop-loss coding.
The complaint alleges investors were promised returns of 40% to 50% within 30 to 45 days and, in some cases, exceeding 100% in less than a month.
The SEC says those representations were false. According to the complaint, only about $380,000, or roughly 3% of investor funds, was used to purchase cryptocurrency without the involvement of bots. The agency says those trades were conducted without the advertised bots and generated no profits.
