Titanium Blockchain CEO Pleads Guilty in $21 Million Digital Asset Fraud Case
Michael Alan Stollery, CEO of Titanium Blockchain Infrastructure Services Inc. (TBIS), has pleaded guilty to committing securities fraud through an initial coin offering (ICO) that the company conducted back in 2018 that raised approximately $21 million from investors in both outside the United States.
In a press release, the Ministry of Justice (DOJ) highlighted legal documents from the case. The 54-year-old resident of Reseda, California used false claims to lure investors into buying BAR, the digital asset offered by his company TBIS. He also failed to register the securities offering with the U.S. Securities and Exchange Commission, authorities said.
“Although 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 he have a valid exemption from the SEC’s registration requirements,” the DOJ wrote.
Stollery has now admitted to falsifying aspects of Titanium blockchain’s white paper; telling investors that he had business dealings with the Federal Reserve and other prominent corporations; planting false customer testimonials on TBIS’ website, and misappropriating investors’ funds for his personal use, including credit card payments and paying bills for a Hawaii condominium.
The Justice Department intends to sentence him on Nov. 18 after a federal judge reviews the case. The self-described “Blockchain Evangelist” could face up to 20 years in prison if convicted.
The case was first opened in 2018 by the SEC. At the time, the regulator said the ICO “was based on a social media marketing blitz that allegedly deceived investors with purely fictitious claims about business prospects.” The SEC also obtained a court order to stop Titanium’s operations and freeze its assets.
DOJ steps up efforts on digital asset fraud cases
The case is just the latest addition to the DOJ’s list of actions in the area of digital assets. Late last month, the Justice Department announced charges in six cases involving digital assets, including its second and largest NFT blanket cover and another ICO fraud case.
The regulator stated in the announcement that it is determined to use “all available tools to protect consumers and investors from fraud and manipulation.” One of these tools is the recently created Special Unit for the Enforcement of Digital Assets.
Bloomberg reports that this unit will work with both local and international partners to crack down on digital asset crime. Eun Young Choi, a veteran cybersecurity attorney, has been appointed to lead the new team.
See: BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets
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