The CEO of Titanium Blockchain Infrastructure Services (TBIS), Michael Alan Stollery, has pleaded guilty for his role in a cryptocurrency fraud scheme.
The United States Department of Justice announced that Stollery pleaded guilty to a fraud scheme involving TBIS’ initial coin offering (ICO), which raised around $21m 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 touted TBIS as a cryptocurrency investment opportunity. He allegedly lured investors to purchase ‘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 U.S. Securities and Exchange Commission (SEC), nor did he have a valid exemption from the SEC’s registration requirements, it said.
The Department of Justice stated that 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. 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 fake client testimonials on TBIS’s website and falsely claimed that 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 the payment of bills for Stollery’s Hawaii condominium.
Stollery pleaded guilty to one count of securities fraud and is scheduled to be sentenced on November 18 and faces up to 20 years in prison.
The US has cracked down on crypto-related fraud. Earlier in the year, it seized $3.6bn in cryptocurrency in what was described as its largest-ever financial seizure. Alongside this, a couple was arrested accused of conspiring to launder billions of dollars in crypto stolen from the hack of crypto exchange Bitfinex.
Copyright © 2022 RegTech Analyst
Copyright © 2018 RegTech Analyst
