The CEO of Titanium Blockchain Infrastructure Services pleaded guilty for his role in a $21 million fraudulent initial coin offering (ICO), says the US Department of Justice. Michael Stollery had touted the ICO as a cryptocurrency investment opportunity. He lured investors, through a series of false and misleading statements, to purchase Titanium Blockchain’s BAR token.
The DOJ alleged that Stollery failed to register TBIS’s offering. It said Stollery did not register the ICO regarding TBIS’s cryptocurrency investment offering with the US Securities and Exchange Commission. Moreover, he did not have a valid exemption from the regulator’s registration requirements. The SEC, in a 2018 complaint, stated that Stollery’s scheme managed to raise $21 million in Ether, Bitcoin, and cash from dozens of investors from 18 states and abroad.
As such, Stollery pleaded guilty to one count of securities fraud. SEC stated that Stollery admitted using investor funds to pay credit card bills for his Hawaii condominium. It added that the TBIS CEO admitted to exaggerating the potential profitability of the token, falsifying aspects of TBIS’ white papers, planting fake client testimonials, and claiming a relationship with prominent businesses and the Federal Reserve on the firm’s website.
Stollery, if convicted, can face up to 20 years in prison.