The U.S. SEC has filed a lawsuit against the founder of Privvy for allegedly being involved in a $12.3 million cryptocurrency scam

According to The Block, the U.S. SEC has filed a lawsuit in the federal court in Houston, accusing Nathan Fuller, a resident of Cypress, Texas, of operating a cryptocurrency scam project involving up to $12.3 million, which used fake artificial intelligence trading bots to defraud investors.

Nathan Fuller told investors that his proprietary AI-based bots could automatically scan cryptocurrency trading platforms, capturing small price gaps through high-frequency arbitrage, and promised returns of 40% to 50% within 30 to 45 days. Some investors were even told that they could receive guaranteed returns of over 100% in just 21 days.

The SEC stated that Nathan Fuller, founder and sole member of Privvy Investments LLC, raised these funds from about 150 investors spread across nine states and two foreign countries between October 2022 and mid-2024. He also conducted business under the alias "Gateway Digital Investments."

It is alleged that only about 3% of the funds were actually used for cryptocurrency trading, while Fuller personally siphoned off at least $6.2 million and paid approximately $5.5 million to early investors in a manner similar to a Ponzi scheme.