Odaily Planet Daily reports that the U.S. Securities and Exchange Commission (SEC) has announced a lawsuit against Texas resident Nathan Fuller, accusing him of illegally raising around $12.3 million from about 150 investors through a fraudulent 'AI crypto trading bot' scheme.

The SEC points out that Fuller, from October 2022 to mid-2024, sold crypto investment joint venture stakes under Privvy Investments LLC and Gateway Digital Investments, claiming to use an 'AI high-frequency arbitrage bot' for trading crypto assets, and promised investors returns of over 40% to 100% within 21 to 45 days as 'guaranteed profits'.

Regulators claim that Fuller falsely stated that investment funds were protected by FDIC insurance, guaranteed bonds, and professional liability insurance. However, the reality is that their so-called trading bots weren't operating as advertised. The SEC alleges that at least $6.2 million of investor funds were misappropriated for personal expenses, and approximately $5.5 million of new investor funds were used for 'Ponzi-style payments,' while misleading investors through forged account statements and fabricated institutional communications.

The SEC has filed a lawsuit in the Southern District of Texas Federal Court, alleging that Fuller has violated securities issuance and anti-fraud laws, seeking a permanent injunction, recovery of illicit gains, and civil penalties.