Key Takeaways
- Michael Alan Stollery has been sentenced to prison for four years and three months for defrauding ICO investors of $21 million.
- The SEC froze the assets of the crypto project in 2018.
- DOJ had alleged that Titanium sold a utility token named “BAR,” but the token, however, “did not have any functionality at the time of the ICO.”
The Chief Executive Officer(CEO) of Titanium Blockchain, Michael Alan Stollery, has been sentenced to prison for four years and three months for defrauding initial coin offering (ICO) investors of $21 million.
The US Department of Justice has accused Strollery for luring investors to purchase his company’s cryptocurrency “through a series of false and misleading statements. In July 2022, Stollery pleaded guilty, admitting that he did not use the invested money as promised but instead commingled the ICO investors’ funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments.
The fraudulent crypto project raised $21 million in merely three months, from December 2017 until March 2018, when the ICO market was at its peak.
DOJ had alleged that Titanium sold a utility token named “BAR,” but the token, however, “did not have any functionality at the time of the ICO [initial coin offering]. Last year, Stollery admitted to forging the token’s white paper and user endorsements of the coin on its site, creating a facade of legitimacy.
Stollery and his company were originally charged with securities fraud by the Securities and Exchange Commission in May 2018. SEC had accused Stollery, alongside his firm Titanium Blockchain Infrastructure Services, of violating the SEC’s antifraud and registration provisions in relation with a multi-million dollar token sale.
The regulatory body had then accused Stollaire of fabricating information in claims that Titanium had relationships with over 30 entities to get more funding, including with Federal Reserve, PayPal, and The Walt Disney Company.
The latest development comes amid SEC ramping up its crypto enforcement actions. Of the 30 enforcement actions, SEC undertook in 2022, 14 involved initial coin offerings (ICOs) similar to Titanium Blockchain’s case, with around 57% of these actions including a fraud allegation.
Recently, the watchdog has added more agents to its crypto-focused division as it continues ramping up enforcement.
