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The U.S. Trustee Program (USTP) has obtained a ruling that denies bankruptcy protection to a Texas individual who sought to escape over $12.5 million in liabilities associated with a cryptocurrency Ponzi scheme.
On August 1, the Bankruptcy Court for the Southern District of Texas issued a default judgment against Nathan Fuller, the proprietor of Privvy Investments LLC. Fuller had initiated a Chapter 7 bankruptcy filing in October 2024, shortly after a state court designated a receiver to take control of his assets due to investor lawsuits.
However, federal investigators discovered that Fuller hid assets, forged documents, and provided false testimony in an attempt to evade repaying his creditors.
Bankruptcy Court Prohibits Crypto Scheme Operator From Discharging $12.5M
As stated by the USTP, Fuller utilized Privvy Investments to attract funds under the pretense of cryptocurrency investments, only to misappropriate investor funds for personal expenditures.
Documentation reveals that he lavishly spent on luxury goods and gambling excursions and acquired a nearly $1 million residence for his ex-wife, who was also involved in the enterprise. Despite their separation, Fuller continued to live at the property.
U.S. Trustee Kevin Epstein, who supervises Region 7, which includes the Southern District of Texas, remarked that the decision highlights the program’s commitment to combating fraud. “Fraudsters attempting to cleanse their schemes will not find refuge in bankruptcy,” Epstein stated in a release.
“The USTP remains alert for cases filed by dishonest debtors, who jeopardize the integrity of the bankruptcy system.”
Investigators claimed that Fuller not only hid significant assets but also neglected to keep records and provided false testimony in both his personal bankruptcy case and the one filed for Privvy.
At one point, Fuller was found in civil contempt for not adhering to court orders. During the proceedings, he acknowledged operating Privvy as a Ponzi scheme, fabricating documents, and delivering false statements aimed at obstructing the work of the court-appointed Chapter 7 trustee.
After failing to respond to the USTP’s allegations, the court issued a default judgment in favor of the agency. Consequently, Fuller remains personally accountable for his debts, including over $12.5 million in unsecured liabilities listed in his filings. Creditors are now permitted to pursue collection efforts against him.
The USTP stated that its mission is to uphold the integrity of the bankruptcy system for debtors, creditors, and the public. The agency highlighted that the outcome in Fuller’s case reflects its dedication to holding dishonest individuals accountable.
This judgment adds to the increasing scrutiny surrounding crypto-related investment schemes. While legitimate blockchain companies continue to secure funding and develop infrastructure, fraudulent operations like Fuller’s underscore the risks that investors face.
Earlier this year, web3 wallet infrastructure company Privy, which is unrelated to Fuller’s business, completed a $15 million funding round led by Ribbit Capital, raising its total to over $40 million.
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The company’s wallet-enabled stack supports projects such as Hyperliquid, Farcaster, OpenSea, and Blackbird, serving more than 50 million accounts across payments, DeFi, and gaming.
The contrast between these developments illustrates a maturing crypto sector still dealing with trust issues arising from fraud.
Fraud Casts a Shadow Over Crypto Sector as Similar Cases Reveal Investor Risks
In a related case, on July 8, San Jose-based fintech company Linqto filed for Chapter 11 bankruptcy in the Southern District of Texas, revealing significant flaws in its business model.
Linqto’s Chapter 11 filing exposes the pre-IPO illusion, as investors may not have owned shares as they believed. #Linqto #Bankruptcy https://t.co/1VVgzRgi5s
— Cryptonews.com (@cryptonews) July 8, 2025
Once promoted as a gateway for everyday investors to acquire pre-IPO shares in tech companies like Ripple and CoreWeave, the platform now faces claims that customers may never have actually owned the shares they thought they purchased.
The company reported assets and liabilities ranging from $500 million to $1 billion, with over 10,000 creditors potentially impacted.
Chief Restructuring Officer Jeffrey Stein stated that “years of mismanagement” and violations of securities laws dating back to 2020 left Linqto potentially insolvent, further undermining confidence in retail access to private markets.
@TheJusticeDept has initiated a civil forfeiture complaint to recover $5M in stolen bitcoin linked to SIM swap attacks.
#Bitcoin #Cybercrime #Simswap https://t.co/tlTqzTUKDr— Cryptonews.com (@cryptonews) September 9, 2025
In a separate matter, the U.S. Department of Justice announced a civil forfeiture action to reclaim over $5 million in Bitcoin stolen through SIM swap attacks.
Prosecutors indicated that attackers hijacked victims’ phone numbers between October 2022 and March 2023, intercepting authentication codes to deplete crypto wallets.
The stolen assets were reportedly funneled through multiple wallets and ultimately into an account at Stake.com, an online casino.
Investigators allege that the perpetrators employed circular transactions to obscure the origin of the Bitcoin before consolidation.
The post Texas Ponzi Scheme Debtor Denied $12.5M Bankruptcy Protection in Crypto Case appeared first on Cryptonews.
