Crypto boss who faked PayPal partnership pleads guilty to $21 million fraud

A cryptocurrency executive who raised $21 million in an initial coin offering (ICO) in 2018 has pleaded guilty to fraud charges.

The Department of Justice (DOJ) announced on Monday that 54-year-old Titanium Blockchain CEO Michael Alan Stollery misled investors with false statements to buy “BARs” – the cryptocurrency token offered by Titanium’s offering (ICOs are a form of fundraising used by crypto) . companies to raise capital).

Prosecutors say Stollery admitted to falsifying aspects of Titanium’s white papers, which sealed the token’s purpose, underlying technology, uniqueness and likelihood of return. He did not register the token with the Securities and Exchange Commission, nor did he have a valid exemption, the agency said.

Titanium, which was presented as offering blockchain infrastructure solutions, in its white paper called services such as “Bring Your Own Cloud”, “Monitoring as a Service”, “Mining as a Service” and “Instant ICO Incubator.”

“Just as steel changed the construction industry forever, Titanium will usher in a new era of networking,” the firm claimed.

Stollery is also believed to have placed fake testimonials on the firm’s website and lied about having business relationships with the Federal Reserve and companies such as PayPal, Verizon, Boeing and Walt Disney to establish legitimacy.

Authorities noted that he also admitted to combining funds raised from the ICO with his personal money, using some for expenses such as credit card payments and bills for his condo in Hawaii.

The Titanium website is now helping scam victims recover ICO funds

Stollery, who is set for sentencing on November 18, has pleaded guilty to one count of securities fraud. He faces up to 20 years in prison.

His guilty plea comes four years after the SEC obtained a court order to stop Titanium’s ICO. The court had also approved an emergency asset freeze and appointed Holland & Knight attorney Josias Dewey as receiver to hold the firm’s assets.

Titan was based in Sherman Oaks, Calif., according to a court filing. The company’s website now shows how investors can submit claims to get their funds back. As of June 28, Titanium has received more than 1,000 claims.

Stollery’s lawyer, Andrew Holmes, told the Wall Street Journal that the “repentant” CEO wanted to operate Titanium legally, but hubris ruined his plans. He added that the majority of the funds that were converted to cryptocurrencies are with the recipient and Stollery wants investors to get back as much of their money as possible.

The DOJ recently announced another indictment related to a cryptocurrency fraud scheme. Last week, the founder of the defunct cryptocurrency business “My Big Coin” was convicted on charges that he raised $6 million by marketing a fraudulent currency.

Randall Crater, the founder, and his associates claimed that the currency was backed by $300 million in gold, oil and other valuable assets.

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