What appeared to be an AI-driven crypto trading operation is now facing scrutiny from the SEC. Between 2022 and 2024, Nathan Fuller, Founder of Privvy Investments and Gateway Digital Investments, allegedly raised $12.3 million from investors by promoting automated arbitrage strategies powered by trading bots.

Yet beneath the idea, capital flows told a different story. Only 3% of investor funds reportedly reached actual trading activity, according to the SEC report. Instead, millions allegedly funded personal spending and Ponzi-style payouts, allowing the operation to appear profitable while attracting new participants.

The money trail raised red flags

As regulators followed the flow of funds, the alleged trading…