DoJ charges Canadian crypto fund manager who ran $42m fraudulent ‘house of cards’

US authorities have filed charges against the Canadian founder of a phoney investment fund that lured $42 million from investors.

The fund, called Gray Digital, was run by 26-year-old Nathan Gauvin. It dazzled investors with records of almost 200% yearly returns, allegedly made by investing customers’ funds across stocks, derivatives, debt, and crypto.

Gauvin faces a 21-count indictment in Brooklyn federal court, including conspiracy to commit securities and wire fraud, bank fraud, identity theft, and money laundering.

“The defendant’s investment company was a house of cards constructed with investor funds and held together with lies,” said Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, in a Wednesday statement.

“When his house of cards collapsed, Gauvin doubled down by obstructing the regulator’s investigation and trying to defraud a lender. Gauvin’s run of lies ends today.”

Gauvin was arrested in England yesterday on a US warrant and is awaiting extradition.

House of cards

Gauvin’s alleged schemes occurred between approximately May 2022 and October 2024 and netted Gray Digital and its flagship fund over $42 million from hundreds of investors.

The fund purported to generate outsized returns through an investment strategy that blended traditional financial assets and strategies, and DeFi, per the DoJ’s statement.

As CEO, Gauvin allegedly lied to investors about his background and experience, as well as Gray Digital’s assets and returns. He allegedly provided fraudulent documents intended to verify Gray Digital’s assets under management and performance.

If found guilty, Gauvin could face up to 30 years in prison for the most serious charges.

SEC probe aftermath

In November 2024, DL News learned that Gray Digital was facing a probe from the US Securities and Exchange Commission.

At the time, half a dozen Gray Digital customers said that they couldn’t withdraw their funds.

One investor who deposited $300,000 said Gauvin’s “polished approach and emphasis on trust” lowered his guard.

When customers asked for their funds back, Gauvin blamed the lack of withdrawals on bad actors.

He said these mysterious figures coordinated mass withdrawals, spread “conspiracy theories,” and contacted his own bank, leading to his account being frozen.

In reality, Gauvin used deposits to pay investor withdrawals and misappropriated millions of dollars in investor funds, which he spent on luxury goods, jewellery and his personal credit card bills, the DoJ alleges.

Gauvin estimated losses from the Gray Digital fraud to be approximately $20 million.

The indictment also alleges that Gauvin undertook yet another fraudulent scheme between approximately May 2025 and June 2025, where he and others provided fraudulent bank statements and other false information to a New York-based firm to obtain approximately $800,000 in credit from two FDIC-insured banks.

Gauvin then used those proceeds to pay personal expenses, including to a private members-only social club in London.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.