SEC charges $12.3M crypto fraud over fake AI trading bots

The U.S. SEC charged Texas resident Nathan Fuller and alleged a crypto fraud that raised about $12.3M from roughly 150 investors through Privvy Investments. The SEC says the pitch used “AI trading bots” marketing and promised unusually high, short-cycle returns—40%–50% in 30–45 days, and profits above 100% in about 21 days—along with claims meant to calm investor concerns. In the complaint filed May 28 in federal court, the SEC alleges Fuller misrepresented regulatory and fund-safety claims, including that he held a money-transmitter license, used a surety bond, and claimed FDIC insurance on investor funds—assertions the SEC says were false or misleading. The SEC also alleges the “AI trading bots” were not real or functional as represented (including alleged stop-loss/AI capability), and that only about $380,000 (~3%) of investor money was used to buy digital assets, generating no profits. The SEC further alleges misuse of at least $6.2M for personal spending and “Ponzi-like” payouts using about $5.5M from new investor funds, while providing fabricated account statements and letters. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties. For traders, this is another enforcement case tied to “AI trading bots” yield claims, a sign to scrutinize similar automation/guaranteed-return promotions for elevated scam risk.