SEC charges Privvy founder in $12.3M crypto fraud built on fake AI bots

The SEC filed a civil complaint against Nathan Fuller, founder of Privvy Investments (and Gateway Digital Investments), alleging he raised about $12.3 million from roughly 150 investors across nine states and two foreign countries by promising proprietary AI bots would perform high-frequency crypto arbitrage with 40%–50% returns, but the bots did not function as advertised. The commission says only about $380,000 was spent on actual crypto purchases, while Fuller misappropriated at least $6.2 million for personal expenses and forwarded about $5.5 million to earlier investors in a Ponzi-like scheme. He allegedly faked a Texas money-transmitter license and insurance, and used ChatGPT to draft a bogus KYC letter via a shell firm to quiet withdrawals. Fuller had previously admitted in bankruptcy proceedings that Privvy was a Ponzi scheme. The SEC is seeking injunctions, disgorgement with prejudgment interest, civil penalties and a bar from securities offerings.