SEC Accuses Texas Man of Running $12.3M Crypto Trading Scheme Using AI Claims

U.S. 3 million from roughly 150 investors through a crypto investment scheme built on false claims of AI-powered trading bots.

U.S. District Court for the Southern District of Texas. CoinDesk reported that Fuller operated through Privvy Investments LLC and the assumed business names Privvy Investments and Gateway Digital Investments. Fuller sold passive joint-venture interests in a purported crypto arbitrage trading operation from at least October 2022 through mid-2024.

He told investors that proprietary AI-based trading bots could scan crypto markets, execute high-frequency arbitrage trades and limit losses through stop-loss coding. 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 only about $380,000, or roughly 3% of investor funds, was used to purchase cryptocurrency.

Those trades were conducted without the advertised bots and generated no profits. 2 million for personal expenses including the purchase of a home, gambling, travel and vehicles. 5 million to make Ponzi-like payments to investors.

As withdrawal concerns grew, Fuller created fabricated account statements showing gains, referenced fictitious entities, and used artificial intelligence to generate a letter from a purported auditing firm claiming investor accounts were under review and would later be liquidated into a trust.

The SEC charged Fuller with violating the registration and antifraud provisions of federal securities laws. The agency is seeking permanent injunctions, disgorgement, civil penalties and a ban on participating in securities offerings.

5 million in debt. Fuller admitted he operated Privvy as a Ponzi scheme and fabricated documentation, according to court records cited by the Justice Department.