$42M Crypto Fraud Scheme: U.S. Charges Canadian Nathan Gauvin in Discord Scam

TLDR

• Nathan Gauvin, 26, charged in a $42M crypto fraud scheme involving Gray Digital Capital and its Gray Fund.
• Gauvin lured investors through Discord, making false promises about high returns and assets.
• He secured $800K in credit with false information, using the funds for personal expenses.
• The fraud ran from May 2022 to October 2024, deceiving investors with falsified performance reports.
• The FBI seeks victims of the fraud while the SEC pursues securities fraud charges against Gauvin.

U.S. federal prosecutors have charged Nathan Gauvin, a 26-year-old Canadian, in a $42 million crypto fraud. Gauvin allegedly targeted investors through Discord, convincing them to invest in Gray Digital Capital Management Inc. and its Gray Fund products. He raised funds under false pretenses and used the money for personal expenses, including luxury purchases.

Multi-Million Dollar Scheme Targets Investors on Discord

According to the U.S. District Court for the Eastern District of New York, Gauvin secured $800,000 in credit by providing false information to a fintech firm. The funds were then used to cover his personal expenses. The fraud involved more than $42 million from investors, which Gauvin diverted for his personal use.

Gauvin also used the funds to pay off previous investors, buy luxury goods, and cover his credit card bills. “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. The U.S. Securities and Exchange Commission (SEC) has filed securities fraud charges against Gauvin.

The Federal Bureau of Investigation (FBI) has released a 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 said. Investigators are looking to identify individuals who may have been affected by Gauvin’s actions.

Crypto Fraud That Ran For Over 2 Years

Gauvin’s fraud scheme spanned from May 2022 to October 2024. During this time, he persuaded investors to put money into Gray Digital and Gray Fund. The company promised a strategy blending traditional finance (TradFi) with decentralized finance (DeFi), but provided falsified performance reports.

Gauvin falsely claimed that the Gray Fund generated double-digit monthly returns and had over $78 million in assets. In reality, the fund had a monthly compounded return of about 1.4%, with far fewer assets than claimed. The fraudulent scheme was furthered with a “seed stock” offering in 2024, which claimed the company had a $60 million valuation.

In the scheme’s later stages, Gauvin claimed the company was worth $60 million and earned over $12 million annually. He sold shares in Gray Digital at $30,000 each, further deceiving investors. The SEC is seeking disgorgement of ill-gotten gains, along with civil penalties and injunctions against Gauvin. The investigation remains ongoing, with the FBI continuing to gather information about potential victims.

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