SEC Charges Canadian Citizen With $18M Fraud Schemes Marketed on Discord
The U.S. Securities and Exchange Commission charged 26-year-old Canadian citizen Nathan Gauvin and three entities he controls – Blackridge LLC, Gray Digital Capital Management USA LLC, and Gray Digital Technologies LLC – with orchestrating two fraudulent securities offerings that raised approximately $18.1 million from more than 40 investors across the United States and abroad.
Gauvin allegedly misappropriated approximately $6.3 million of investor funds and used fabricated credentials, false performance metrics, and fictitious account statements to lure investors into his schemes.
According to the SEC’s complaint, filed in the U.S. District Court for the Eastern District of New York, Gauvin gained a following on Discord by falsely presenting himself as a successful investment professional managing more than $1 billion in assets through Blackridge, which in reality was a mere shell entity Gauvin formed when he was 22 years old.
When opening Blackridge’s brokerage account at a Connecticut-based brokerage firm, i.e., “Broker A,” Gauvin listed his occupation as “truck driver and heavy equipment operator.” Until February 2023, the Blackridge account with Broker A held balances between $50 and $1,000.
In late 2021, Gauvin began participating in a Discord community called “Cryptonaiz.” Introducing himself only as “Gray,” Gauvin strategically positioned himself within this community by sharing investment insights and recommendations related to investments in crypto assets. From late 2021 through early 2022, “Gray” gradually built a reputation and following within the Cryptonaiz community for providing seemingly objective investment advice. In early 2022, Gauvin created the Gray Digital community on Discord. Gauvin first represented Gray Digital as an educational service charging $200/month for membership. Investors could pay this fee to Gray Digital directly or have it deducted from their purported investment profits. Eventually, a sizeable number of Cryptonaiz members followed Gray to the Gray Digital Discord community.
From September 2022 to November 2024, Gauvin and his entities allegedly raised approximately $18.1 million from investors through an unregistered offering of interests in the “Gray Fund,” a purported diversified investment fund advised by Gray Digital and Gauvin that would purportedly hold and trade debt and equity securities, derivatives, and crypto assets.
The complaint alleges that Gauvin and Gray Digital falsely claimed that the Gray Fund generated double-digit monthly returns and held over $78 million in assets, when, in fact, the fund actually had a monthly compounded return of approximately 1.4% and its assets were far lower than claimed.
The SEC also alleges that Gauvin misappropriated investor funds to finance a lavish lifestyle, including using hundreds of thousands of dollars for purchases of custom jewelry, luxury concierge services, real estate, and art.
In a second alleged scheme which began in May 2024, Gauvin allegedly offered “seed stock” in Gray Digital Technologies at $30,000 per share, falsely claiming the company had a $60 million valuation and more than $12 million in annual revenue. In reality, the complaint alleges that Gray Digital Technologies had no operations, assets, or revenue. According to the complaint, Gauvin raised at least $60,000 from two retail investors and then ceased communicating with them about this offering.
“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. “Investors should always verify the credentials of anyone offering investment opportunities, especially when those opportunities are promoted through social media or online communities.”
The SEC’s complaint charges Gauvin and his three entities with violating the antifraud provisions of the federal securities laws and Gauvin, Gray Digital, and Gray Digital Technologies with registration violations. The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and conduct-based injunctions against all defendants, along with a bar against Gauvin acting as an investment adviser.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York announced criminal charges against Gauvin.
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