SEC Sues Texas Man Over $12.3M Alleged Crypto Scheme Using Fake AI Trading Bots

The U.S. Securities and Exchange Commission (SEC) has sued a Texas man for allegedly orchestrating a $12.3 million cryptocurrency scheme that promised high returns through AI-powered trading bots. According to the SEC, the defendant, Fuller, claimed his bots could generate substantial profits, but in reality, only about 3% of the invested funds were used for actual crypto trading.

The SEC alleges that Fuller diverted approximately $6.2 million for personal use and another roughly $5.5 million to make Ponzi-like payments to earlier investors, while only about $345,000 was deposited into a crypto trading exchange. This scheme highlights the growing concern around fraudulent activities in the crypto space, particularly those involving AI and automated trading systems.

For everyday investors, this case serves as a stark reminder to be cautious when encountering promises of high returns through AI or automated trading. It underscores the importance of thorough research and due diligence before investing in any crypto-related venture. Investors should watch for red flags such as guaranteed returns, lack of transparency, and overly complex investment strategies. Always verify the legitimacy of any trading platform or AI system before committing funds. Read more → https://www.coindesk.com/business/2026/05/30/sec-sues-texas-man-over-usd12-3-million-alleged-crypto-scheme-built-on-fake-ai-trading-bots