The US Commodity Futures Trading Commission (CFTC) today announced that it’s filed charges against a crypto-forex scheme operator for fraudulently soliciting nearly $1.6 million from investors to trade foreign currency.

This particular case involves an ICO to fund building out a blockchain that leverages AI to trade the currency markets.

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According to the complaint, Alan Friedland and his Florida-based companies, Fintech Investment Group, Inc. (Fintech) and Compcoin LLC, solicited the cash from investors to participate in an initial coin offering. The defendants sold their own token, Compcoin, whose primary function was to grant investors access to ART, Fintech Investment Group’s proprietary, automated algorithmic forex trading platform.

Fintech had originally planned to boost up to $45 million through an initial coin offering (ICO) in 2017. Defendants falsely told their customers, among other things, that they’re delivering 10 percent in quarterly returns. What’s more, they touted that when traders begin experiencing increased returns on their forex trades via ART, the demand for Compcoin will increase, thus increasing the worth of the coin for the token holders.

In order to prop up the fraud, Friedland allegedly told investors that he’s working to secure approval from the National Futures Association (NFA), which never occurred. Although Fintech had been approved by the NFA in August 2016, but the regulator has never allowed the startup to sell Compcoins.

The action prompted a reply from the NFA which suspended Fintech and Friedland from membership and prohibited them from taking any customer funds associated with forex trading.

“In fact, as alleged within the complaint, the defendants knew that no customer could lawfully utilize ART until Fintech obtained approval from. Thus, consistent with the complaint, the purchasers of Compcoin never gained access to ART as promised, and were left with a valueless asset,” the agency further explains.

Many of the victims sought higher monthly income on their investments, having made attempts to sell their coins with no success. The CFTC said that Compcoin blockchain was not on time and had not launched while the token holders never generated any income from trading forex, and were only left with a worthless coin.

The CFTC has asked the court to supply full restitution to defrauded pool participants, disgorgement of ill-gotten gains and therefore the payment of appropriate civil monetary penalties. additionally to fiscal penalties, it also asked for the imposition of permanent registration, trading bans and a final injunction from future violations of federal commodities laws.

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