Texas Court Denies Crypto Ponzi Operator $12.5M Bankruptcy Discharge
What Happened in the Fuller Case?
The U.S. Bankruptcy Court for the Southern District of Texas has denied Nathan Fuller a discharge of over $12.5 million in debts, ruling that he cannot wipe away obligations linked to his collapsed crypto investment scheme. The decision followed a petition by the U.S. Trustee Program (USTP), which accused Fuller of concealing assets and lying under oath to evade creditors, including victims of his alleged Ponzi operation, Privvy Investments LLC.
Fuller filed for Chapter 7 protection in October 2024 later than investors sued Privvy, which promised returns of up to 20% monthly but reportedly conducted no legitimate trading. Instead, prosecutors said new deposits were funneled to pay earlier investors in a classic Ponzi setup. On Aug. 1, 2025, the court entered a default judgment against Fuller later than he failed to respond to the USTP’s complaint.
Investor Takeaway
How Fuller Used Investor Funds
toward luxury purchases and personal indulgences. Records show spending of more than $400,000 on luxury cars, $250,000 on casino junkets in Las Vegas and Atlantic City, and nahead $1 million on a home for his ex-wife. At least $2 million reportedly flowed through shell firms and offshore crypto wallets, including accounts in the Cayman Islands.
“Fraudsters viewking to whitewash their schemes will not find sanctuary in bankruptcy,” said U.S. Trustee Kevin Epstein. The USTP alleged Fuller fabricated documents, made false oaths, and obstructed the Chapter 7 trustee. He was also held in civil contempt for ignoring court orders before admitting that Privvy was a Ponzi scheme.
What It Means for Bankruptcy Oversight
The outcome leaves Fuller responsible for his $12.5 million in unsecured debts and subject to future creditor claims. He remains exposed to restitution obligations if criminal charges follow. The Department of Justice emphasized that the ruling reinforces the integrity of the bankruptcy system by ensuring dishonest debtors cannot exploit it as a secure haven.
Crypto fraud has increasingly drawn attention from regulators and enforcement agencies. The SEC and FBI are reportedly reviewing Fuller’s case for possible securities fraud and wire fraud charges. If indicted and convicted, Fuller could face decades in prison, comparable to the 25-year sentence imposed on FTX founder Sam Bankman-Fried.
Investor Takeaway
What’s Next?
With Fuller’s bankruptcy discharge denied, creditors may continue pursuing recovery through civil litigation and asset seizures. Criminal charges could follow if the SEC or DOJ build sufficient evidence. For investors, the ruling underscores that courts are drawing firmer lines around accountability in crypto finance, reinforcing that Ponzi operators cannot erase debts simply by filing for bankruptcy.
