The CFTC alleged that the defendants’ claims were false since the National Futures Association (NFA) hasn’t approved their disclosure documents. They offered Compcoin before seeking NFA’s approval. In fact, the NFA rejected the defendants’ risk disclosure statements.
Additionally, the Commission alleged that the defendant’s claims regarding ART’s performance were not based on real trading. It was mainly based on hypothetical performance.
Furthermore, the CFTC noted that Compcoin buyers never gained access to ART and they ended up owning a worthless digital asset.
The defendants decided to settle all the allegations of the Commission on the fourth day of the trial, which started on January 31, 2022.
Under the court order, Fintech Investment Group, Compcoin, and Mr. Friedland must pay $1,200 in restitution and a $600,000 civil monetary penalty. The defendants are prohibited from soliciting or trading in commodity interests or registering with the CFTC in any capacity.
In a statement, CFTC Acting Director of Enforcement Vincent McGonagle said that the Commission will “continue to focus on customer protection and vigorously litigate the cases it files to obtain appropriate relief.”
