- The founder of Titanium Blockchain Infrastructure Services has been jailed for four years after operating a fraudulent ICO in 2018
- Michael Stollery was handed the term after pleading guilty to defrauding investors to the tune of $21 million
- TBIS promised huge partnerships and Stollery hyped up the potential of the company
Michael Stollery, the founder of Titanium Blockchain Infrastructure Services (TBIS), has been handed a four-year jail sentence after pleading guilty to fraud through a $21 million ICO in 2018. Stollery, who promised that TBIS would “disrupt the provisioning and virtualization space by being first-to-market”, duped the money out of investors during the ICO boom, promising the world but in reality offering nothing but fake partnerships and bluster. Stollery pleaded guilty to various crimes associated with the promotion of TBIS and the token sale.
Stollery Made the Most of ICO Boom
In August 2017, when the ICO market was running rampant, Stollery conceived the TBIS scam, which purported to be a start-up company using blockchain technology to develop an IT platform. Stollery engaged in what the Securities and Exchange Commission (SEC) described as a “social media marketing blitz,” falsely claiming that corporate giants such as Boeing, Ebay, General Electric, Intel, and Microsoft were all clients of TBIS. This was sufficient to persuade investors to contribute $21 million during a late 2017-early 2018 ICO.
Even though the companies in question requested that their names and logos be removed from all promotional materials, Stollery continued to promote the ICO through videos and social media, likening it to investing in Intel or Google. The TBIS website also featured fabricated testimonials from corporate clients, and Stollery fraudulently claimed to have connections with numerous corporate customers.
SEC Brought TBIS Down in May 2018
In May 2018, the SEC obtained a freeze order for TBIS, which rendered the company inactive. Legal action against Stollery commenced shortly afterward, and in July he confessed to failing to register the ICO as a security, falsifying elements of TBIS’s white papers to attract investors, planting fake client testimonials on the company’s website, and making false claims about business connections with the Federal Reserve and numerous prominent companies to create an illusion of legitimacy.
Additionally, Stollery admitted to commingling funds from ICO investors with his personal funds, using them to pay off debts and cover expenses for his Hawaii condominium. Stollery faced a maximum sentence of 20 years, but got away with just four years and three months.
