The U.S. Securities and Exchange Commission has charged Nathan Fuller with defrauding investors out of $12.3 million through a crypto scheme that pitched fake AI-powered trading bots. According to the complaint filed this week, Fuller told victims his bots could generate steady returns by automatically trading digital assets. Instead, the SEC says, he used new investor money to pay off earlier backers — a classic Ponzi structure — and pocketed a cut for himself.
The man behind the bots
Fuller, whose location isn't specified in the charging document, isn't a known figure in the crypto industry. The SEC describes him as a solo operator who marketed his so-called "AI arbitrage bots" on social media and through direct messages. He claimed the bots exploited price differences across exchanges, a strategy that sounded plausible to investors chasing easy yields in a bull market. The SEC says there's no evidence the bots ever functioned as advertised.
How the fraud worked
The scheme ran for about 18 months, according to the regulator. Fuller allegedly promised monthly returns of 15% to 30%, an eye-popping figure that should have raised red flags. Investors sent him cryptocurrency — mostly Bitcoin and Ethereum — which he said would be pooled into a trading algorithm. In reality, the SEC alleges, Fuller moved the funds through a web of personal wallets and shell companies, then wired portions to his own bank accounts. When investors asked for withdrawals, he delayed or offered excuses.
SEC's case and what comes next
The SEC is seeking disgorgement of the $12.3 million, plus civil penalties and a permanent injunction barring Fuller from any future securities offerings. The complaint was filed in federal court, and a judge will now set a schedule for discovery and trial. Fuller hasn't yet responded publicly. The agency's enforcement division has been particularly aggressive this year against crypto schemes that wrap themselves in AI buzzwords, and this case fits that pattern.
For the victims, the money is likely gone. The SEC can't guarantee restitution, and Fuller's remaining assets — if any — will be sorted out in court. The next concrete step is Fuller's formal response, due within 21 days of the filing.
