Michael Stollery, the founder, and CEO of Titanium Blockchain Infrastructure Services Inc. (TBIS) has pleaded guilty to his role in a crypto security fraud scheme that netted $21 million through an initial coin offering (ICO).
According to the US Department of Justice (DOJ), Stollery failed to register his ICO with the SEC as required, and he did not have an exemption from those requirements.
Stollery persuaded investors to buy “BARs,” a crypto coin issued by TBIS, by making false and misleading statements. Moreover, he admitted to fabricating the token’s white paper and user endorsements on its website.
He raised about $21 million from investors in the United States and abroad between November 2017 and at least January 2018 by planting fake testimonials on TBIS’ website. He made false claims about having business relationships with the Federal Reserve and prominent companies to attract potential investors.
In addition to running an unregistered ICO, Stollery admitted to using investor funds to pay credit card bills and bills for his Hawaii condominium.
Stollery is scheduled to be sentenced on November 18 and faces up to 20 years in prison.