US regulator uncovers $ 42 million cryptocurrency fraud on Discord

The U.S. Attorney’s Office has charged 26-year-old Canadian citizen Nathan Gauvin with creating a large-scale crypto-fraud scheme that caused investors to lose more than $ 42 million. According to the investigation, Gauvin used the Discord platform to raise funds under the guise of investments in traditional finance (TradFi) and decentralized finance (DeFi). He was arrested in the UK, and the US Department of Justice released the indictment documents.

Investigators claim that Gauvin, the founder of Gray Digital Capital Management Inc. and the Gray Fund, misled investors by showing false financial documents and reports of «successful operations.» He claimed that his fund showed a return of 4384% and managed more than $ 1 billion in assets, although in fact these figures were fictitious. Among the victims of the fraud are investors who entrusted funds based on his advice on Discord.

Instead of investing the money he received in projects, Gauvin used most of it to pay back previous investors and to pay for personal expenses such as luxury purchases, jewelry, and credit card payments. The U.S. Securities and Exchange Commission (SEC) said he tried to obstruct the investigation by submitting fake documents. In May-June 2025, the suspect also provided fake bank statements to a New York-based fintech company to obtain an $ 800,000 loan, part of which he spent on a membership in a private club in London.

According to U.S. Attorney General Joseph Nocella, «the defendant’s investment company was a house of cards built with investor funds and held together by lies.» As the scheme began to collapse, Gauvin, according to the prosecutor, tried to cover his tracks and defraud creditors. His arrest was the end of a series of deceptions that lasted several years.

This case is another reminder of the risks of investing in unverified crypto projects. In September 2025, the United States also convicted Ramil Ventura Palafox, head of Praetorian Group International, who pleaded guilty to creating a $ 200 million pyramid scheme that affected more than 90,000 investors worldwide.