CEO of Titanium Blockchain Pleads Guilty to Securities Fraud
In a case stretching back as far as 2018, Michael Alan Stollery – the CEO of Titanium Blockchain Infrastructure Services (TBIS) – was accused of securities fraud by the SEC due to the way the ICO of his platform was handled.
The case reached a turning point this week, as Stollery admitted to one count of securities fraud. The ICO took place between November 2017 and January 2018, one of many less than stellar coin offerings occurring during the 2017 boom.
Misleading Information
According to a statement by the US Department of Justice, Stollery admitted to falsifying parts of the project’s whitepaper in a bid to attract investors both in the USA and abroad.
“Stollery admitted that, to entice investors, he falsified aspects of TBIS’s white papers, which purportedly offered investors and prospective investors an explanation of the cryptocurrency investment offering, including the purpose and technology behind the offering, how the offering was different from other cryptocurrency opportunities, and the prospects for the offering’s profitability.”
Additionally, the announcement indicated that false testimonials from clients were also planted on the website, as well as content claiming relationships with the Federal Reserve and several unnamed companies in a bid to provide the appearance of legitimacy to Titanium Blockchain.
$21 Million in Investments
The ICO raised about $21 million in Bitcoin, Ether, and cash for the platform and its proprietary token, BAR, a sum which would have likely been far less impressive without the shenanigans listed above. However, the multi-million dollar fumble does not end here.
Further investigation by the SEC and DOJ revealed that Stollery admitted to mischief, misappropriating user funds to pay for personal expenses – such as personal credit card bills and the lease for his condominium in Hawaii.
The SEC also stated that Stollery failed to properly register his company’s ICO with the regulator. However, the defendant officially only pleaded guilty to one count of securities fraud.
Stollery is scheduled to be sentenced on the 18th of November. If convicted by the federal court, he faces up to 20 years in prison, subject to the U.S. Sentencing Guidelines and other factors. However, given the guilty plea taken by the defendant, it is unlikely that the sentence will carry the full weight of the law.
