Discord Crypto Scam: Canadian Charged in $42M Fraud Scheme Targeting Users

A Canadian man faces charges for allegedly running a multi-million dollar crypto fraud—luring victims through Discord promises.

How the Scheme Worked

The operation reportedly used Discord servers to pitch fraudulent investment opportunities. Promises of high returns pulled users into a trap—funds vanished instead of generating profits.

The $42M Fallout

Authorities peg the total losses at a staggering $42 million. The case highlights how social platforms become hunting grounds for bad actors—even in a maturing market.

Regulators Circle

Charges signal growing regulatory scrutiny on crypto-related fraud. While enforcement ramps up, the incident serves as a stark reminder: if an offer sounds too good to be true on Discord, it probably is—especially when someone's promising returns that would make a traditional banker blush.

Multi-Million Dollar Scheme Targets Investors on Discord

According to the indictment announced by the U.S. District Court for the Eastern District of New York, Gauvin gave false information to a fintech firm to secure $800,000 in credit. He then used the funds to pay for personal expenses, including for a private club in London.

“In total, Gauvin fraudulently raised more than $42 million from Gray Digital investors and obtained more than $800,000 in credit from lenders,” an SEC announcement read.

Per the prosecutors, the defendant used most of the money to pay previous investors, buy luxury goods and pay 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.

Authorities arrested Gauvin in England on Wednesday on a provisional arrest warrant. The US SEC has also filed for securities fraud charges. The regulator noted that the accused continued to submit false documents to the SEC during regulatory investigations.

Further, the Federal Bureau of Investigation separately released a statement, seeking to identify potential victims of the fraud. “Victims may be eligible for certain services, restitution, and rights under federal and/or state law,” the FBI said.

US prosecutors charged a Canadian citizen with orchestrating a scheme that fraudulently raised more than $42 million, targeting individuals on chat app Discord while claiming to invest in traditional finance and crypto https://t.co/092fnwDGTH

Crypto Fraud That Ran For Over 2 Years

The indictment said that from May 2022 to October 2024, Gauvin and others enticed investors to put money into Gray Digital and Gray Fund. Among the companies, the flagship fund purported to offer investors a strategy “that blends TradFi (traditional finance) and DeFi (decentralized finance).”

The defendant allegedly misrepresented Gray Digital’s performance by providing falsified documents to investors.

He also claimed that the Gray Fund generated double-digit monthly returns and held over $78 million in assets. However, in reality, the fund had a monthly compounded return of approximately 1.4% and assets were far lower than claimed.

Later, there was a second scheme that started in May 2024, which touted a “seed stock” offering in Gray Digital at $30,000 per share. At the time, Gauvin said the company had a $60 million valuation and more than $12 million in annual revenue.

The SEC has sought disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and conduct-based injunctions against Nathan Gauvin.

“Investors should always verify the credentials of anyone offering investment opportunities, especially when those opportunities are promoted through social media or online communities,” SEC’s Marinaro warned.