U.S. authorities allege that a Canadian man and three companies he controls defrauded investors and financial firms in a series of scams that started out on the social media platform Discord.
The U.S. Securities and Exchange Commission (SEC) has charged Nathan Gauvin, a 26-year old from Sudbury, Ont., and three entities he controls — Blackridge, LLC, Gray Digital Capital Management USA, LLC, and Gray Digital Technologies, LLC — in connection with the alleged schemes.
In its complaint, the SEC alleged that Gauvin began participating in a Discord community focused on crypto trading in 2021 before starting his own group chat on the platform in early 2022 that attracted a number of participants from the crypto community. According to the regulator, Gauvin’s allegedly began making false claims on the chat group about his investment credentials and experience.
“Gauvin gained a following on Discord by falsely presenting himself as a successful investment professional managing over a billion dollars in assets through Blackridge, which in reality was a mere shell entity,” the SEC said.
The SEC charged that he then began soliciting investors through that online community. It alleged that, between September 2022 and November 2024, Gauvin raised over US$18 million from investors through an unregistered securities offering in a purported investment fund, the Gray Fund, that included misrepresentations about the fund’s returns and assets under management. The SEC also alleged that approximately US$6.3 million of investors’ money was misappropriated.
The regulator also alleged that, in a second scheme, Gauvin offered “seed stock” in Gray Digital Technologies, based on false representations about its annual revenue and its valuation. That scheme allegedly raised US$60,000 from investors.
The SEC’s complaint charges Gauvin and his three companies with violating federal securities laws, and Gauvin, Gray Digital and Gray Digital Technologies are charged with registration violations. In its complaint, the regulator is seeking permanent injunctive relief, disgorgement with prejudgment interest, civil penalties and conduct-based injunctions against all defendants, along with a ban against Gauvin acting as an investment adviser.
In a parallel action, the U.S. attorney’s office for the Eastern District of New York also unsealed a 21-count criminal indictment charging Gauvin with conspiracy to commit securities fraud and wire fraud, securities fraud, wire fraud, investment advisor fraud, bank fraud, money laundering, obstruction of justice and aggravated identity theft.
In the criminal indictment, U.S. authorities allege that Gauvin fraudulently raised over US$42 million from Gray Digital investors, and that most of investors’ money was used to fund investor withdrawals, in addition to the millions of dollars that were misappropriated for personal use.
It also alleged that, after the Gray Digital scheme collapsed in 2024, Gauvin provided the SEC with fraudulent documents in an effort to obstruct its investigation. In addition, the SEC alleges that he provided false financial data to a New York-based financial technology company as part of a scheme to obtain US$800,000 in credit from two banks.
Gauvin was arrested on Wednesday in the U.K. on a provisional arrest warrant issued in the Eastern District of New York.
None of the allegations have been proven, and he is presumed to be innocent of the criminal charges.