The complaint, filed May 30 in the U.S. District Court for the Southern District of Texas, names Fuller's company Privvy Investments LLC along with its assumed names, Privvy Investments and Gateway Digital Investments. According to the SEC, Fuller promised investors returns of 40 to 50 percent within 30 to 45 days, and in some cases touted gains of more than 100 percent in 21 days. The pitch centered on proprietary AI-powered crypto trading bots that, the SEC alleges, either did not exist or failed to work as described.

Only 3% of Funds Touched a Crypto Market

The numbers in the SEC complaint are stark. Of the $12.3 million Fuller collected, approximately $380,000 (around 3 percent) was ever used to purchase cryptocurrency. That trading generated no profits. The rest of the money went elsewhere: at least $6.2 million to Fuller personally, covering a roughly $1 million home, gambling, trading cards, travel, and a Jeep. About $5.5 million was paid out to earlier investors as fake "returns," a classic Ponzi mechanic designed to sustain the illusion of a functioning system. The breakdown accounts for approximately $12.08 million of the $12.3 million total, with the remainder not separately itemized in the complaint.

To stall investors who tried to withdraw funds, Fuller fabricated account statements and, notably, used generative AI to produce a letter from a fictitious auditing firm claiming accounts were under review. He also falsely claimed his operation held a Texas money-transmitter license, FDIC insurance, surety bonds, and professional liability coverage. None of those credentials existed. In separate bankruptcy proceedings, the Department of Justice said Fuller was denied discharge of more than $12.5 million in debt after he admitted Privvy was a Ponzi scheme and was found to have fabricated documentation.

The SEC is seeking permanent injunctions, disgorgement of gains plus prejudgment interest, civil monetary penalties, and a ban on future securities offerings.

A Familiar Pattern Across Three Continents

The Privvy case is a domestic US enforcement action, but its mechanics will be recognizable to anyone who followed two major collapses in Africa and South Asia in 2025.

In April 2025, CBEX, a Nigerian crypto platform that promised 100 percent returns in 30 days, collapsed and took an estimated $800 million from between 250,000 and 300,000 Nigerian investors, with the platform also reaching Kenya.

Blockchain analytics firm Elliptic traced funds through the TRON network to Huione Pay, a network the US Treasury's FinCEN has designated a primary money-laundering concern for facilitating more than $4 billion in illegal transactions. Wycklife Sewe, a Kenyan cryptocurrency investigator, described the mechanism in comments to Al Jazeera: "They have designed their system using code to fool you that your money is still there and you can see it growing. But your money is moved immediately after you deposit."

One month earlier, in March 2025, Treasure NFT pulled approximately $160 million from investors in India, Pakistan, and Bangladesh, with an estimated 100,000 Pakistani investors among those affected. Indian victims included individuals from lower-income, less digitally literate communities. The platform claimed to use AI-driven NFT trading and offered guaranteed daily returns. It vanished after pulling in roughly $143.8 million in a single six-hour window on March 24, 2025 (representing the bulk of the scheme's estimated $160 million in total losses), later resurfacing under new names, including Treasure Fun and NovaNFT.

All three schemes share the same structural pattern: implausibly high guaranteed returns backed by AI or bot branding, Ponzi payouts to early investors to manufacture credibility, fabricated documents to delay withdrawals, and eventual collapse.

The SEC's New Enforcement Unit Is Watching This Category

The Fuller case is one of CETU's enforcement actions targeting AI misrepresentation in crypto markets. CETU, the SEC's Cyber and Emerging Technologies Unit, replaced the former Crypto Assets and Cyber Unit in February 2025.

Under Chairman Paul Atkins, the CETU has explicitly shifted focus away from technical registration violations and toward fraud cases that harm retail investors, with AI misrepresentation identified as a priority target. A March 2026 Morrison Foerster analysis noted that "public companies can expect to see the SEC pursue enforcement actions against entities that fraudulently misrepresent their artificial intelligence capabilities," a warning directed at publicly traded companies but with clear implications for the broader market.

The broader landscape reflects why. Chainalysis estimates global crypto scam losses reached a record $17 billion in 2025. The FBI reported Americans alone lost $11.4 billion to crypto scams that year, a 22 percent year-on-year increase, with investment fraud averaging a loss of $62,604 per case. Chainalysis found AI-enabled scams are 4.5 times more profitable than traditional fraud methods, with reports of generative AI-enabled schemes up 456 percent between May 2024 and April 2025. The Asia-Pacific region saw its fraud rate climb to 3.3 percent in 2025 from 2.0 percent in 2024, a 65 percent year-on-year increase, also according to Chainalysis.

For developers and project teams building legitimate algorithmic trading tools, the regulatory signal varies by jurisdiction but points in the same direction. In the United States, CETU scrutinizes projects that use "bot," "AI," or "automated returns" language in marketing materials, even where no fraud is alleged. In South Asia and Africa, the relevant authorities are different: India's Financial Intelligence Unit and SEBI, Nigeria's SEC and EFCC, Kenya's Capital Markets Authority, and Pakistan's SECP are all increasingly active in this space, though none yet has a dedicated AI-fraud enforcement unit equivalent to CETU. Across all of these jurisdictions, audited smart contracts, transparent on-chain activity records, and verifiable technology documentation are becoming baseline expectations for projects that want to avoid being placed in the same enforcement category as Privvy.

No statement from Fuller or his legal counsel has been reported as of publication.