SEC and FBI Target Canadian in $42M Multi-Year Investment Scandal
Regulators just dropped the hammer on a cross-border crypto con.
The Crackdown Hits
Forget moonshots—this story is about a multi-year scheme that allegedly siphoned millions from hopeful investors. The SEC and FBI have leveled charges against a Canadian individual, accusing him of orchestrating a sophisticated investment fraud. The total haul? A staggering $42 million.
Following the Paper Trail
The case highlights the relentless, if sometimes slow-moving, machinery of financial oversight. It’s a classic playbook: promise outsized returns, exploit the hype cycle, and vanish with the funds. Authorities claim the operation ran for years, weaving a complex web that ultimately couldn't hide from forensic accounting and subpoenas.
The Bigger Picture
This enforcement action sends a clear signal—the long arm of the law is getting more comfortable reaching into the digital asset space. While it’s a black eye for the industry's reputation, proponents argue that weeding out bad actors is a necessary step toward mainstream legitimacy. It’s the painful price of admission for a maturing market. Just another reminder that in finance, if it sounds too good to be true, it probably is—especially before your morning coffee.
Multi-million dollar scheme targets investors
According to a 21-count indictment unsealed in the U.S. District Court for the Eastern District of New York, Gauvin lured hundreds of investors into his web-based investment company, Gray Digital Capital Management Inc., and its flagship Gray Fund. The firm purported to offer a strategy “that blends TradFi (traditional finance) and DeFi (decentralized finance).”
Prosecutors allege that Gauvin provided false information about his credentials, the firm’s assets, and performance. He allegedly fabricated bank and brokerage statements to show inflated returns, at one point claiming that the Gray Fund had cumulative returns of 4,384%.
The asset attestations were supposedly verified by an audit firm, but prosecutors say the documents were doctored and not independently confirmed.
U.S. Attorney Joseph Nocella said, “As alleged, the defendant’s investment company was a house of cards constructed with investor funds and held together with lies. When his house of cards collapsed, Gauvin doubled down by obstructing the regulator’s investigation and trying to defraud a lender. Gauvin’s run of lies ends today.”
Misuse of investor funds
Authorities claim that Gauvin used most of the money raised from investors to pay earlier investor withdrawals, purchase luxury goods, jewelry, and settle personal credit card bills.
Some funds were also diverted to pay personal expenses, including membership at a private club in London. Prosecutors estimate losses from the Gray Digital fraud at approximately $20M.
Fraudulent credit and regulatory obstruction
Beyond defrauding investors, Gauvin allegedly obtained $800,000 in credit from two FDIC-insured banks by submitting false information to a financial technology company. The funds were reportedly spent on personal expenses.
Gauvin is also accused of obstructing a Securities and Exchange Commission (SEC) investigation by providing falsified documents. The SEC filed parallel securities fraud charges, noting that Gauvin continued submitting false documents even during the ongoing regulatory probe.
Arrest and calls for victims
Authorities arrested Gauvin in England on December 10, 2025, following a provisional arrest warrant issued by the Eastern District of New York. At the time, no personal lawyer for him could be immediately identified.
The FBI has urged potential victims to come forward, stating, “Victims may be eligible for certain services, restitution, and rights under federal and/or state law.” FBI Assistant Director in Charge Christopher G. Raia said, “Gauvin allegedly engaged in a separate scheme, using falsified records, to induce a company to lend him an additional $1.5M.
The FBI remains dedicated to dismantling any smoke and mirrors act targeting unsuspecting victims for financial enrichment.”
Online persona and background
Gauvin, who went by the online names “defigray” and “gray,” built a following on Discord by offering seemingly objective investment advice. He also founded Blackridge LLC, claiming the firm managed over $1B in assets when he was 22 years old, according to the SEC.
Prosecutors allege that from May 2022 to October 2024, Gauvin and his associates relied on online platforms and forged financial records to bring investors into Gray Digital and the Gray Fund. Instead of putting the money into the investments he promised, they say Gauvin diverted most of it for his own personal use.
Charges and allegations
Gauvin is facing a 21-count federal indictment that includes 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.
Prosecutors say the charges outline the full scope of the schemes he is accused of running. Prosecutors say these charges arise from his alleged schemes to defraud both individual investors and a New York-based financial technology company.
The charges remain allegations, and Gauvin is presumed innocent unless and until proven guilty in a U.S. federal court.
Also Read: India HPZ Token Scam: CBI Names 30 Accused in Major crypto Fraud
