In April 2020, the Commodity Futures Trading Commission (CFTC) filed fraud charges against Alan Friedland and his companies, Fintech Investment Group and Compcoin. Regulators accused Friedland of defrauding investors of over $1.6 million through a deceptive cryptocurrency scheme. The case detailed a pattern of promising high returns from an automated trading bot that never worked, collecting millions, and delivering nothing of substance.
Friedland launched Fintech Investment Group and Compcoin around 2016. Compcoin was presented as a cryptocurrency but lacked public trading access, effectively rendering it without market value or utility. He sold these tokens to investors based on a single promise: returns generated by a supposed forex trading bot named ART.
Marketing materials described Compcoin as "an incentivized blockchain-based Financial Investment Coin" where "owners will measure its value through the performance of its automated, algorithmic trading platform." Compcoin's whitepaper claimed ART had undergone eight years of testing and refinement. Friedland assured potential investors the technology was ready for the open market.
Between 2016 and 2018, Friedland collected over $1.6 million from individuals purchasing Compcoin. Customers were instructed to park their tokens with the company. Friedland stated Fintech would confirm these transactions on the blockchain and then manage each customer's individual forex account using the ART bot.
The promised trading never materialized. ART was a fiction. The bot had never executed a single trade in real time. Friedland marketed results based entirely on hypothetical projections. Federal regulations permit the use of hypothetical performance data, but only if accompanied by a specific, clear disclaimer. Friedland provided no such disclaimer on Compcoin's website or in any presentations.
As a Commodity Trading Advisor (CTA), Compcoin also faced another legal obligation. CTAs must file trading program disclosures with the National Futures Association (NFA) at least 21 days before offering the program to customers. Fintech submitted documents to the NFA, but never secured approval. From September 2017 to May 2018, the NFA repeatedly informed Friedland in writing that his disclosure documents were insufficient. He continued selling Compcoin regardless of these regulatory warnings.
By 2020, Compcoin held no value. All digital asset exchanges had delisted the token. The CFTC subsequently filed its charges. The agency’s complaint identified the scheme as a violation of the Commodity Exchange Act’s anti-fraud provisions, specifically Section 4b(a)(2)(A) and (C), and Section 4o(1)(A) and (B), which prohibit fraudulent solicitations and misrepresentations by CTAs.
Friedland did not disappear from public view after the CFTC action. He reappeared as the architect behind NRGY, a new cryptocurrency scheme built on smart contracts. The structure of NRGY mirrored his previous venture: an unproven automated trading system promising guaranteed returns for a cryptocurrency that only the operator could sell. This pattern, investigators noted, directly paralleled the fraudulent activities seen with Compcoin.
The CFTC seeks full disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against Friedland and his companies. Investors who suspect they may be victims of commodity fraud can report it to the CFTC's Division of Enforcement or explore options through the CFTC Reparations Program.