Tech scam alert: Fake AI trading bots led to $12. 3 million crypto fraud

A Texas man faces serious legal trouble after allegedly tricking people into investing over $12 million in a crypto scheme that promised big profits from AI trading bots. The U. S. regulator claims Nathan Fuller ran his operation through two fake companies, promising investors rapid returns—sometimes over 100% in weeks. But the reality was far different. Instead of using the fancy AI bots he advertised, he mostly lost the money on bad trades. Only a tiny fraction, about $380, 000, was even used for crypto purchases, and those trades made no money at all. What made this case stand out was how Fuller kept the scam going. When investors got nervous, he faked account statements to show fake profits. He even created a fake letter from an auditing firm using artificial intelligence, pretending their money was safe in a trust. Behind the scenes, though, he was spending millions on personal luxuries like houses, trips, and even gambling. He also used over $5 million to pay old investors with new investors’ money—a classic Ponzi move.The scam ran for nearly two years, from late 2022 to mid-2024, attracting around 150 people. Many were likely drawn in by the idea of easy riches from AI and crypto. But the SEC says Fuller never had the technology he claimed. His so-called arbitrage trading operation was mostly a lie. Now, he’s being sued for breaking securities laws, facing fines, repayment demands, and a ban from working in finance. A separate court case against him also revealed he admitted in a bankruptcy filing that the scheme was a scam all along. Experts warn that fake trading bots and guaranteed returns are common red flags in crypto scams. Many fraudsters use AI buzzwords to sound more credible. But real investments never promise fast profits without risk. This case shows how con artists can manipulate technology and trust to steal millions, leaving victims chasing lies instead of real gains.