Titanium Blockchain boss gets 3 years in prison for $21M ICO scam
The founder and CEO of Titanium Blockchain Infrastructure Services (TBIS) received a prion sentence of four years and three months for defrauding initial coin offering (ICO) investors of $21 million.
The sentencing came after Titanium Blickchain’s CEO, Michael Alan Stollery, pleaded guilty to one count of securities fraud last year. The maximum sentence for that charge is up to 20 years, but Stollery received only a third of that.
The US Securities and Exchange Commission (SEC) acted on the Titanium ICO before criminal charges were brought against Stollery. The regulator stopped the ICO in May 2018 after it defrauded ICO investors in the US and abroad. The fraudulent project raised $21 million in just three months, from December 2017 to March 2018, when the ICO market peaked.
Another fraudulent ICO
Titanium Blockchain offered cryptocurrency investment opportunities through its original token, BAR. However, Stollery promoted the ICO to investors with a number of false and misleading statements. Through its white paper ad campaigns on social media, the fraudulent project was singled out as having ties to the Federal Reserve and dozens of prominent companies, including PayPal, Boeing and Walt Disney.
In the guilty plea, the 54-year-old CEO admitted to falsifying the promotional documents to lure investors.
The expansion of the fraudulent ICO went further as the Stollery did not invest the funds raised in any blockchain development. Instead, he misused the ICO funds that came with his personal funds and used a portion of them for personal expenses, including the purchase of a condominium in Hawaii.
The authorities further categorized the BAR token as an unregistered security and accused the Stollery of failing to register with the SEC or receive an exemption from registration requirements.
A failed exit strategy
The actions of the securities regulator against Titanium Blockchain came after the project announced the theft of a huge amount of tokens from its wallet. The revelation in February pushed BAR token prices down by 95 percent, forcing cryptocurrency exchanges to halt trading in it.
US law enforcement has criminally pursued the masterminds behind several cryptocurrency scams. Earlier this month, Chet Stojanovich received a three-year prison sentence for defrauding more than a dozen buyers of cryptocurrency mining equipment out of more than $2 million. He was also ordered to forfeit more than $2.15 million and provide restitution of more than $2.1 million to victims.
Furthermore, the mastermind behind the fraudulent currency and cryptocurrency trading platform EminiFX, Eddy Alexandre, pleaded guilty to soliciting more than $248 million in investments from tens of thousands of investors. He pleaded guilty to one count of merchandise fraud and now faces a maximum prison term of 10 years. He also agreed to forfeit about $249 million and pay restitution to victims.
The founder and CEO of Titanium Blockchain Infrastructure Services (TBIS) received a prion sentence of four years and three months for defrauding initial coin offering (ICO) investors of $21 million.
The sentencing came after Titanium Blickchain’s CEO, Michael Alan Stollery, pleaded guilty to one count of securities fraud last year. The maximum sentence for that charge is up to 20 years, but Stollery received only a third of that.
The US Securities and Exchange Commission (SEC) acted on the Titanium ICO before criminal charges were brought against Stollery. The regulator stopped the ICO in May 2018 after it defrauded ICO investors in the US and abroad. The fraudulent project raised $21 million in just three months, from December 2017 to March 2018, when the ICO market peaked.
Another fraudulent ICO
Titanium Blockchain offered cryptocurrency investment opportunities through its original token, BAR. However, Stollery promoted the ICO to investors with a number of false and misleading statements. Through its white paper ad campaigns on social media, the fraudulent project was singled out as having ties to the Federal Reserve and dozens of prominent companies, including PayPal, Boeing and Walt Disney.
In the guilty plea, the 54-year-old CEO admitted to falsifying the promotional documents to lure investors.
The expansion of the fraudulent ICO went further as the Stollery did not invest the funds raised in any blockchain development. Instead, he misused the ICO funds that came with his personal funds and used a portion of them for personal expenses, including the purchase of a condominium in Hawaii.
The authorities further categorized the BAR token as an unregistered security and accused the Stollery of failing to register with the SEC or receive an exemption from registration requirements.
A failed exit strategy
The actions of the securities regulator against Titanium Blockchain came after the project announced the theft of a huge amount of tokens from its wallet. The revelation in February pushed BAR token prices down by 95 percent, forcing cryptocurrency exchanges to halt trading in it.
US law enforcement has criminally pursued the masterminds behind several cryptocurrency scams. Earlier this month, Chet Stojanovich received a three-year prison sentence for defrauding more than a dozen buyers of cryptocurrency mining equipment out of more than $2 million. He was also ordered to forfeit more than $2.15 million and provide restitution of more than $2.1 million to victims.
Furthermore, the mastermind behind the fraudulent currency and cryptocurrency trading platform EminiFX, Eddy Alexandre, pleaded guilty to soliciting more than $248 million in investments from tens of thousands of investors. He pleaded guilty to one count of merchandise fraud and now faces a maximum prison term of 10 years. He also agreed to forfeit about $249 million and pay restitution to victims.
