Texas resident on the hook for $12.5 million in creditor claims after running a crypto 'Ponzi scheme'

A Texas man, Nathan Fuller, has officially been denied a bankruptcy discharge of over $12.5 million in debts by the U.S. Bankruptcy Court for the Southern District of Texas after the U.S. Trustee Program successfully challenged his claims, according to a statement on Wednesday.

The USTP argued that Fuller "concealed assets and lied in his bankruptcy case to evade his creditors, including investors in his cryptocurrency Ponzi scheme," according to a post on the Department of Justice’s website.

Backing up, on Aug. 1, a Texas bankruptcy court default judgment was obtained against debtor Nathan Fuller, who had claimed Chapter 7 bankruptcy protections. Fuller filed for bankruptcy in October 2024 after being sued by individuals who invested with his crypto trading company, Privvy Investments LLC.

"Fraudsters seeking to whitewash their schemes will not find sanctuary in bankruptcy," U.S. Trustee Kevin Epstein said. "The USTP remains vigilant for cases filed by dishonest debtors, who threaten the integrity of the bankruptcy system."

Fuller allegedly diverted investor funds, in part, to pay for luxury goods, gambling trips, and a nearly $1 million home for his now-ex-wife. After being sued, a receiver was appointed to take possession of his assets; however, it appears Fuller attempted to conceal a portion of his assets.

"Following an investigation, the USTP's Houston office filed a complaint objecting to Fuller’s discharge alleging that Fuller had concealed extensive assets, failed to keep records, and made multiple false oaths regarding his bankruptcy case and a separate bankruptcy filing for Privvy," the USTP argued.

"After being held in civil contempt for failing to comply with court orders, Fuller admitted that he had operated Privvy as a Ponzi scheme and fabricated documentation to advance the scheme," it added. "Fuller also admitted that he gave false testimony and falsified bankruptcy documents to hinder the chapter 7 trustee appointed to administer his and Privvy’s bankruptcy cases."

Fuller reportedly failed to respond to the USTP’s complaint, leading to a default judgment against him and leaving him responsible for his $12.5 million in unsecured debts and future creditor claims.