Titanium Blockchain CEO Sentenced to Four Years in Prison

In a cryptocurrency fraud scheme that took place in late 2017 and early 2018, investors purchased BARs, a crypto token, to participate in an initial coin offering (ICO) for Titanium Blockchain Infrastructure Services (TBIS), a company founded by Michael Stollery. The ICO raised approximately $21 million from investors in the United States and overseas. However, in 2018, the United States Securities and Exchange Commission (SEC) accused Stollery of not registering the ICO with the regulator and other allegations.

In July 2022, Stollery pleaded guilty to one count of securities fraud for his role in the fraud scheme. He admitted to falsifying aspects of TBIS’ whitepapers, planting fake client testimonials on the TBIS website, and falsely claiming business relationships with the United States Federal Reserve, which misled investors about TBIS’ legitimacy and prospects for profit. He also admitted to commingling ICO investors’ funds with his own and using a portion to pay for unrelated expenses.

Although Stollery was facing up to 20 years in prison, he will instead serve a total of four years and three months for his involvement in the cryptocurrency fraud scheme. The SEC has been increasing its actions against the cryptocurrency space in recent years, with 30 enforcement actions against digital-asset market participants in 2022, up 50% from the 20 actions in 2021. Of the 30 enforcement actions in 2022, 14 involved initial coin offerings (ICOs), with more than half of these including a fraud allegation.

According to Abe Chernin, vice president of Cornerstone Research and co-head of its FinTech practice, the SEC continues to pursue actions alleging that tokens issued in ICO-related unregistered securities offerings were investment contracts subject to SEC regulation and enforcement. Chernin also noted an increase in assistance to the SEC from outside agencies and organizations during crypto-related investigations under the Gensler administration.

Overall, the sentencing of Michael Stollery is a reminder of the SEC’s increased scrutiny of the cryptocurrency industry and its commitment to prosecuting fraudulent activities.


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Titanium Blockchain’s CEO Pleas Guilty of ICO Fraud worth $21m

Michael Alan Stollery, CEO of Titanium Blockchain Infrastructure Services Inc. (TBIS), has admitted of involving multiple fraudulent accounts in a 2018 initial coin offering (ICO).

In May 2018, Stollery and his company were charged by the U.S. Securities and Exchange Commission (SEC) with conspiracy to defraud investors.

Stollery admitted that he had conspired to defraud millions of cryptocurrency investors through ICOs. And by forging the white paper of TBIS’s ICO, implanted false customer recommendations to create ICO’s planned marketing activities and legitimacy and publishing misleading and false information with development potential.

In the cryptocurrency’s marketing campaign, Michael Alan Stollery asserted how TBIS is different from other cryptocurrency opportunities and the lucrative prospects of the offering.

They also assured investors that their precious tokens run on the Titanium Blockchain. Coaxing investors into buying the cryptocurrency token “BAR” through a series of false and misleading statements. Or the coins offered by the ICO of TBIS.

Stollery is not registered with the U.S. Securities and Exchange Commission (SEC) for the ICO of TBIS’ cryptocurrency investment product, nor is there a valid exemption from the SEC’s registration requirements.

The company raised about $21 million from investors in the U.S. and overseas through an initial coin offering (ICO).

He admitted that instead of investing the client’s money, he mixed it with personal assets, using a portion of the funds to pay his own credit card and bills for his Hawaii vacation home.

The lawsuit is scheduled to be sentenced on Nov. 18 and Stollery faces up to 20 years in prison, according to court documents.

Image source: Shutterstock


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