SEC Sues Texas Man for $12.3M AI Crypto Fraud
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- SEC sued Texas man Fuller for a $12.3 million crypto fraud built on proprietary AI-based trading bots he claimed would conduct high-frequency arbitrage trading across crypto platforms.
- Fuller's bots "did not function as represented" per the complaint, and he allegedly misappropriated at least $6.2 million of the $12.3 million raised for personal expenses.
- Fuller allegedly used roughly $5.5 million for Ponzi-like payments to earlier investors and sent fake account statements plus fabricated correspondence from fictitious entities to keep the scheme running.
- The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties against Fuller.
- The SEC separately acknowledged that since fiscal year 2022 it brought 95 enforcement actions and imposed $2.3 billion in penalties for book-and-record violations that "identified no direct investor harm" and "produced no investor benefit or protection."
Why it matters: The Fuller case shows the SEC still pursuing individual AI-branded crypto fraudsters while publicly self-critiquing its own record — 95 actions and $2.3 billion in penalties since FY2022 for violations the agency now says produced no investor benefit. Investors burned by Fuller's fake bots lost real money, but the regulator's parallel admission signals a recalibration of what it considers productive crypto enforcement going forward.
