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Texas federal court rejected a $12.5 million bankruptcy protection bid by Nathan Fuller, who ran a cryptocurrency Ponzi scheme through Privvy Investments LLC, according to the U.S. Department of Justice. The ruling exposes Fuller to ongoing creditor lawsuits, marking a significant crackdown on crypto fraud.
Fuller filed for Chapter 7 bankruptcy in October 2024 after investors sued, alleging he diverted funds for luxury goods, gambling, and a $1 million home for his ex-wife. The U.S. Trustee Program (USTP) challenged the filing, accusing Fuller of concealing assets, falsifying records, and lying under oath. Held in civil contempt for defying court orders, Fuller admitted to operating Privvy as a Ponzi scheme, leading to a default judgment against him.
The decision underscores increasing judicial scrutiny of crypto scams. “Fraudsters won’t find sanctuary in bankruptcy,” said U.S. Trustee Kevin Epstein, emphasizing the USTP’s commitment to protecting the bankruptcy system’s integrity. Investors now have a clearer path to pursue asset recovery, though full repayment remains uncertain.
This case reflects broader regulatory efforts to curb crypto fraud, with courts signaling zero tolerance for deceptive practices. It follows similar incidents, like Linqto’s 2025 Chapter 11 filing, exposing vulnerabilities in crypto investment platforms. Investors are urged to verify project legitimacy and avoid high-yield schemes promising unrealistic returns.
The ruling strengthens calls for robust crypto regulations, as the U.S. aims to balance innovation with investor protection. With Fuller liable for $12.5 million in unsecured debts, this case serves as a warning: transparency and compliance are non-negotiable in the evolving crypto landscape.
