The Securities and Exchange Commission has charged a Texas man, Nathan Fuller, with running a $12.3 million crypto fraud scheme. Fuller allegedly promised 150 investors guaranteed returns of up to 50% in 45 days, claiming proprietary AI-powered trading bots would execute high-frequency arbitrage.
According to the SEC, the bots never functioned as represented. At least half of the funds-$6.2 million-were diverted for personal expenses, while another $5.5 million was used to make Ponzi-like payments to earlier investors. Fuller also provided fake account statements and fabricated insurance documents. The SEC is seeking permanent injunctions and civil penalties.
This case underscores rising regulatory scrutiny of AI-linked crypto schemes, following similar charges against multiple platforms last year.