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

Core Viewpoint - US authorities have charged Nathan Gauvin, the founder of Gray Digital, for running a fraudulent investment fund that deceived investors out of $42 million through false claims of high returns and misappropriation of funds [1][2][4]. Group 1: Allegations and Charges - Gauvin faces a 21-count indictment including conspiracy to commit securities and wire fraud, bank fraud, identity theft, and money laundering [2]. - The fraudulent activities reportedly took place between May 2022 and October 2024, attracting over $42 million from hundreds of investors [4]. - If convicted, Gauvin could face up to 30 years in prison for the most serious charges [5]. Group 2: Investment Strategy and Misrepresentation - Gray Digital claimed to generate nearly 200% yearly returns by investing in a mix of stocks, derivatives, debt, and cryptocurrencies [1][4]. - Gauvin allegedly misled investors about his qualifications and the fund's performance, providing fraudulent documents to support his claims [5]. Group 3: Regulatory Investigation and Fund Mismanagement - In November 2024, it was revealed that Gray Digital was under investigation by the US Securities and Exchange Commission, with several investors unable to withdraw their funds [6]. - Gauvin attributed the withdrawal issues to external "bad actors," while in reality, he misused investor deposits to cover withdrawals and spent millions on personal luxuries [7]. - The estimated losses from the fraud are approximately $20 million, highlighting the scale of the misappropriation [7].