Titanium Blockchain Pleads Guilty to Crypto Fraud
The CEO of Titanium Blockchain Infrastructure Services (TBIS), Michael Alan Stollery, has pleaded guilty to his role in a cryptocurrency fraud scheme.
The US Department of Justice announced that Stollery pleaded guilty to a fraud scheme involving TBIS’ initial coin offering (ICO), which raised about $21 million from investors in the US and overseas.
The court documents allege that Stollery was the CEO and founder of TBIS, a cryptocurrency investment platform, and designated TBIS as a cryptocurrency investment opportunity. He allegedly lured investors to buy “BARs”, the cryptocurrency token or coin offered by TBIS’s ICO, through a series of false and misleading statements.
Despite being required to do so, Stollery did not register the ICO regarding TBIS’ cryptocurrency investment offering with the US Securities and Exchange Commission (SEC), nor did it have a valid exemption from the SEC’s registration requirements, it said.
The Department of Justice stated that Stollery admitted that, in order to lure investors, he falsified aspects of TBIS’s white papers, which allegedly offered investors and potential investors an explanation of the cryptocurrency investment offering. These included the purpose and technology behind the offering, how it differed from other crypto opportunities and the prospects for the offering’s profitability.
It stated that Stollery also planted false customer testimonials on TBIS’s website and falsely claimed he had business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy.
Stollery also admitted that he did not use the invested money as promised, but commingled the ICO investors’ funds with his personal funds, using at least a portion for expenses unrelated to TBIS, such as credit card payments and paying bills for Stollery’s Hawaii condominium . .
Stollery pleaded guilty to one count of securities fraud and is scheduled to be sentenced Nov. 18 and faces up to 20 years in prison.
The US has cracked down on crypto-related scams. Earlier this year, it seized $3.6 billion in cryptocurrency in what was described as the largest financial seizure ever. Alongside this, a couple was arrested accused of conspiring to launder billions of dollars in crypto stolen from the hack of crypto exchange Bitfinex.
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