<\/p>\n
The SEC has charged Texas resident Nathan Fuller over an alleged $12.3 million AI crypto arbitrage scheme that promised triple digit returns in weeks.<\/p>\n
<\/p>\n
U.S. securities regulators have charged Texas resident Nathan Fuller with orchestrating a fraudulent cryptocurrency trading scheme that raised roughly $12.3 million from about 150 investors through entities including Privvy Investments between October 2022 and mid 2024, according to a\u00a0litigation release<\/a>\u00a0from the Securities and Exchange Commission SEC.<\/p>\n The SEC alleges Fuller told investors he had built a proprietary artificial intelligence powered high frequency arbitrage \u201ctrading robot\u201d that could generate extraordinary, low risk profits on crypto assets, while in reality diverting millions of dollars for personal use and running what regulators describe as a Ponzi style operation.<\/p>\n According to the complaint, Fuller marketed investment contracts that promised returns of \u201cover 40 to 50 percent\u201d within 30 to 45 days, and in some cases \u201cguaranteed\u201d returns of more than 100 percent in as little as 21 days, claims that far exceed even the most aggressive yield offerings seen during previous cycles of speculative crypto mania such as the collapse of Mirror Trading International and other arbitrage themed schemes flagged by the\u00a0SEC<\/a>.<\/a><\/p>\n Regulators say the vaunted AI trading robot \u201cdid not operate as advertised,\u201d and instead of deploying most of the capital into legitimate cryptocurrency markets, Fuller allegedly misappropriated at least $6.2 million of investor funds for personal expenses including luxury goods and travel, while using approximately $5.5 million to make payouts to earlier investors, mimicking the classic flows of a Ponzi scheme.<\/p>\n The SEC\u2019s filing describes a pattern of forged account statements, fabricated documents, and false performance updates that were used to reassure investors and entice new victims, echoing recent enforcement actions against AI branded crypto scams that used fake trading dashboards, doctored screenshots, and scripted chat group \u201ctestimonials\u201d to lure users into bogus platforms, as in a separate $14 million WhatsApp based AI tip operation detailed by the\u00a0Hacker News<\/a>.<\/p>\n <\/p>\n Court documents cited by ChainCatcher further note that Fuller sold these products through several vehicles tied to Privvy Investments, part of a broader wave of AI infused marketing that has swept both traditional and digital asset markets since 2023 and has already drawn multiple enforcement actions for deceptive practices targeting retail investors.<\/a><\/p>\nSEC says AI crypto robot pitch hid $12.3 million fraud<\/h2>\n
Alleged Ponzi mechanics and AI hype<\/h2>\n