- The founder of Titanium Blockchain Infrastructure Services has pleaded guilty to fraud over the project’s ICO
- TBIS raised $21 million in 2017-2018 based on lies told by Michael Stollery
- Stollery pleaded guilty to one count of securities fraud
Another day, another ICO bust. This time it’s the turn of Michael Stollery, the founder of Titanium Blockchain Infrastructure Services (TBIS), a 2018 ICO that promised to “disrupt the provisioning and virtualization space by being first-to-market”. TBIS duped investors out of $21 million, with the promise of the project based on nothing but fake partnerships and bluster.
TBIS Rode 2017 ICO Wave
Stollery had the idea for the TBIS scam in August 2017, just when the ICO market was hotting up, purporting to be a start-up company seeking to develop an IT platform using blockchain technology. Stollery engaged in what the Securities and Exchange Commission (SEC) called “a social media marketing blitz” that falsely claimed that corporate giants such as Boeing, Ebay, General Electric, Intel and Microsoft were all clients of TBIS, which was enough to get investors to hand over $21 million during a late 2017-early 2018 ICO.
Despite the companies in question demanding that their name and logo be removed from all promotional material, Stollery still promoted the ICO through videos and social media and compared it to investing in Intel or Google.
The TBIS website also contained fabricated testimonials from corporate customers and that Stollaire publicly, and fraudulently, claimed to have relationships with numerous corporate clients.
SEC Froze Assets in May 2018
The SEC obtained a freeze order for TBIS in May 2018, at which point TBIS was essentially dead in the water. Proceedings against Stollery started shortly after and concluded on Friday when he admitted to not registering the ICO as a security, falsifying aspects of TBIS’s white papers to entice investors, planting fake client testimonials on TBIS’s website and falsely claiming to have had business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy.
Stollery further admitted commingled ICO investors’ funds with his personal funds, using it to pay off debts and paying bills for his Hawaii condominium.
After cutting a deal with the SEC, Stollery pleaded guilty to one count of securities fraud and will be sentenced on November 18, where he faces up to 20 years in prison, although it will likely be much less than this.