BuilderDefi Review: Alan Friedland’s third NRGY Ponzi scheme
Despite settling his CFTC CompCoin fraud settlement last week, Alan Friedland is still pushing crypto Ponzis.
Not billed as such but quite obviously an NRGY sequel, today we’re looking at BuilderDefi.
A visit to BuilderDefi’s website reveals the promise to build “a better financial system for everyone”.
Builder is the future of decentralized finance, a one-of-a-kind distributed business building platform that enables the creation of decentralized apps.
No details about who is behind BuilderDefi are provided.
BuilderDefi’s website domain was privately registered on November 8th, 2021.
On Sunday February 6th a guy going by “Sal Alicio” hosted a BuilderDefi webinar.
I can’t find this name so I’m assuming I’ve got it wrong. That’s what it sounds like though so we’ll run with it (if anyone recognizes him leave details in the comments).
Alicio presents as the person behind BuilderDefi. He doesn’t take full credit though, stating he hired Alan Friedland as BuilderDefi’s “developer and architect”.
The guy that I brought on board and that I hired, to be the developer and the architect of this Builder project.
Alan is sort of the architect, the brain behind this entire platform that we built for Builder.
That Friedland is in fact running BuilderDefi becomes evident later in the call.
It’s also worth pointing out that the contract link on BuilderDefi’s website points to NRGY.
NRGY is also directly referenced on BuilderDefi’s website:
NRGY was Friedland’s second attempt at crypto fraud, after the CFTC went after him for CompCoin.
Friedland did take the case to trial but, rather than lose, settled mid-trial last week.
BuilderDefi is supposed built around BLDR. But with the website linking to NRGY’s contract, whether BLDR exists or not (yet) is unclear.
What is clear is BuilderDefi’s pitch includes a 5% a week ROI.
Alicio pitches BuilderDefi’s passive returns as an alternative to traditional banking:
I want you to think about this for a moment. Is there another cryptocurrency out there, that can pay that kind of return?
Does your bank pay you 1% a week?
That’s what we’re targeting here and I think that’s really important for the community.
That they know they’re putting their hard-earned money to work for them. That’s what it is.
To encourage investment, two-level deep referral commissions are also available.
Convince others to invest in NRGY (or BLDR) and you’ll get 8%. If your recruits solicit investment, you’ll get 3% of those funds.
The aforementioned webinar hosted by Alicio features him giving a presentation on the opportunity. He’s joined by Santos Kidd and Chris Hawk.
Kidd claims he was washing dishes before getting into finance. He now runs Kinaole Financial, a debt elimination service with a dead website.
Between cracking jokes about buying children from the Philippines on credit, Kidd explains Kinaole Financial is part of BuilderDefi’s offering.
Chris Hawk is an NRGY alumni. Alicio, who claims he got involved with Friedland and Hawk “about a year ago” (likely also making him an NRGY alumni), states Hawk “pretty much handles the NFT side of this whole thing.”
This is a repackaging of Starstake, some music NFT bullshit Hawk was touting last year.
Starstake was supposed to be part of NRGY.
While he is referenced in Alicio’s webinar, it’s unclear whether Friedland was supposed to appear on it.
He only jumps on after someone going by Henry asks about how long invested funds will be tied up for.
Locked liquidity when BuilderToken is released. Is it gonna be locked for 3 months, 6 months, 1 year, 5 years?
Alicio appears to have a mini panic attack (“Um, hold on a second…”), before Friedland comes to the rescue (“Alan, is Alan here?”).
It seems like Alicio didn’t understand the question, which on its own is a bit concerning.
Alicio: Hey Alan, did you understand that question? Sorry…
Friedland: Yeah he wanted to know what the locked liquidity of Builder’s gonna be.
I should point out that Alicio being clueless isn’t surprising.
Friedland had Duane Noble and Chris Hawk front NRGY. Alicio is playing the same role in BuilderDefi.
I looked up Noble and, as of late January, he was pushing some Polygon NRGY integration waffle:
Getting back to the webinar, in answering Henry’s question, Friedland reveals;
The way that it’s set up … we didn’t want to have where early investors, who also got the benefit of the lower price of the coin, would be able to pull large amounts of coin right away, out of the staking contract, (to) the detriment to people that staked (invested) later.
And so the idea in the design of Builder was that there would be a calendar percentage of staking that you could withdraw your earned rewards, which are quite substantial, each and every week if you choose – or you can reinvest those into the staking contract.
But the original purchase amount, you wouldn’t be able to withdraw that for the first forty weeks.
Friedland goes on to acknowledge “people on this call are going to have all the advantages”, versus those who invest later.
This is typical of any Ponzi scheme.
Later in his answer Friedland spells out the Ponzi flow of money within Builder.
With Builder, the beautiful part about it (is) new rewards are only minted when new money is staked.
Someone has to come in with capital, purchase the coin, the funds go into the liquidity pool on the decentralized exchange and only then does the protocol mint new rewards over the following three weeks, that are shared with all the stakers.
The take-away there is those funds invested into the pool, are what’s withdrawn on the backend (converting worthless Builder tokens to USDC, which is then cashed out elsewhere).
To summarize, NRGY bagholders are being transitioned to BLDR – except the BLDR link on BuilderDefi still points to NRGY.
5% a week is the going passive return rate, with referral commissions also on offer.
Instead of the NRGY instant dump followed by a slow-bleed collapse…
…BLDR investment will be locked up for 40 weeks – after which early investors will clean out what’s left.
During those first 40 weeks, those with the largest amount invested (Alan Friedland and friends), will clean out invested sums through ROI withdrawals.
Rank and file BuilderDefi investors meanwhile are encourged to reinvest:
The idea is that by the time they’re ready to withdraw, there isn’t anything left.
BuilderDefi is still a closed-loop flow of money. Returns are monopoly money until withdrawals are realized, with said withdrawals paid out of invested funds.
In other words, BuilderDefi is as Ponzi as Ponzi gets.
Unfortunately BuilderDefi isn’t likely to attract the attention of the CFTC. I only saw signals mentioned.
There were plans for automated trading with NRGY through TradeGenie, but that seems to have been dropped.
What BuilderDefi does violate is US securities law, which is regulated by the SEC. They haven’t moved on NRGY or NRGYGO.
Whether anything happens with BuilderDefi now in light of the CFTC settlement remains to be seen.