- Trending
- Comments
- Latest
U.S. prosecutors charged Canadian national Nathan Gauvin, 26, with orchestrating a $42 million investment fraud through Discord communities where he promised high returns that never materialized.
The SEC said Gauvin falsely claimed his Gray Digital Capital Management fund held over $78 million in assets and generated double-digit monthly returns, according to an indictment filed Tuesday in Brooklyn federal court.
Authorities say the crypto fraud scheme thrived for over two years as Gauvin used Discord groups to cultivate credibility, presenting himself as an expert overseeing Gray Digital Capital Management Inc. and its Gray Fund products.
Investigators allege that he leveraged social media psychology to gain trust quickly—an increasingly common trend in online financial scams.
According to an indictment filed by the U.S. District Court for the Eastern District of New York, Gauvin also provided falsified information to obtain $800,000 in credit, spending it on luxury goods and exclusive lifestyle perks, including payments for a private London club.
“In total, Gauvin fraudulently raised more than $42 million from Gray Digital investors,” the U.S. Securities and Exchange Commission (SEC) announced, underscoring the scale of the crypto fraud scheme.
Prosecutors allege that Gauvin claimed Gray Fund generated double-digit monthly returns and held over $78 million in assets, despite actual data showing a compounded monthly return of just 1.4% and significantly lower asset totals.
Gauvin exploited the trust of his online followers to perpetrate a brazen fraud, said Jaime Marinaro, Associate Director of the SEC’s Fort Worth Regional Office.
Marinaro added a critical warning to the public: Investors should always verify the credentials of anyone offering investment opportunities, especially when those opportunities are promoted through social media or online communities.
The crypto fraud scheme appears to have relied heavily on inflated numbers, doctored documents, and aggressive marketing to expand across Discord, where communities of retail investors remain highly vulnerable to sophisticated digital fraud.
Gauvin was arrested in England under a provisional warrant as authorities coordinated across borders to halt the expanding crypto fraud scheme.
In addition to criminal charges, the SEC filed securities fraud allegations and revealed the defendant continued submitting falsified documents even while under investigation.
The Federal Bureau of Investigation (FBI) issued a parallel statement urging potential victims to come forward.
Victims may be eligible for certain services, restitution, and rights under federal and/or state law, the FBI announced, signaling that more individuals may have been affected by the crypto fraud scheme than currently identified.
Federal documents describe a second scheme that launched in May 2024, promising investors “seed stock” in Gray Digital at $30,000 per share.
Gauvin allegedly claimed the company had a $60 million valuation and over $12 million in annual revenue, figures prosecutors say were fabricated.
The SEC is now seeking disgorgement of ill-gotten gains, civil penalties, and injunctions to prevent Gauvin from engaging in future financial services activities.
Analysts say the aggressive pursuit reflects the rising urgency of cracking down on crypto fraud schemes before they scale globally through online channels.
