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Titanium Blockchain CEO Sentenced to 4 Years and 3 Months in Prison for Cryptofraud Scheme

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On March 25th, according to an official announcement from the US Department of Justice, Michael Alan Stollery, founder and CEO of the cryptocurrency investment platform Titanium Bl

Titanium Blockchain CEO Sentenced to 4 Years and 3 Months in Prison for Cryptofraud Scheme

On March 25th, according to an official announcement from the US Department of Justice, Michael Alan Stollery, founder and CEO of the cryptocurrency investment platform Titanium Blockchain Infrastructure Services (TBIS), was sentenced to four years and three months in prison for allegedly engaging in a $21 million cryptofraud scheme. Previously, he had admitted to conducting a $21 million fraudulent ICO in 2018 and failing to register with the United States Securities and Exchange Commission (SEC) as required, And forged the white paper on the token and the user’s recognition of the token on their website.

The founder of TBIS was sentenced to four years and three months in prison for allegedly carrying out a $21 million encryption fraud scheme

The US Department of Justice has announced that Michael Alan Stollery, the founder and CEO of cryptocurrency investment platform Titanium Blockchain Infrastructure Services (TBIS), has been sentenced to four years and three months in prison for engaging in a $21 million cryptofraud scheme. Stollery had previously admitted to conducting a fraudulent initial coin offering (ICO) in 2018, failing to register with the Securities and Exchange Commission (SEC), and forging the white paper on the token and the user’s recognition of the token on their website.

Overview of the Cryptofraud Scheme

Stollery, who also went by the pseudonym “Michael Stollaire,” and others allegedly made false and misleading statements to potential investors about the company’s business and operations. They claimed that the company’s blockchain technology could help secure and track illegal drug shipments, prevent the loss of government tax revenue from counterfeit tobacco products, and allow secure and efficient banking transactions.
To finance the development of its technology, TBIS launched an ICO in November 2017 and raised approximately $21 million from investors. In reality, the company’s technology did not exist, and Stollery and his associates used the funds for personal expenses, including luxury cars and homes. Moreover, Stollery allegedly forged a letter from a prominent accounting firm to support the false claims about the company.

The Legal Actions Against Stollery

In March 2018, the SEC obtained an emergency court order to halt the ICO, alleging that it was fraudulent and unregistered. In May 2020, Stollery pleaded guilty to one count of conspiracy to commit wire fraud and one count of transacting in a monetary instrument that was derived from unlawful activity. The maximum penalty for these offenses is 20 years in prison and a fine of $500,000.
On March 25, 2021, Stollery was sentenced to four years and three months in prison by US District Judge Carl J. Nichols. In addition, he was ordered to forfeit $20,748,202.18 and to pay restitution of the same amount to the victims of the fraud scheme. He will also serve three years of supervised release after his prison term.

Implications for the Crypto Industry

The Stollery case highlights the risks associated with ICOs and other fundraising methods in the cryptocurrency industry, which often lack regulatory oversight and transparency. It also underscores the importance of due diligence by investors, who should carefully research the business and management team behind any blockchain project before investing.
Furthermore, the SEC has recently taken a more aggressive stance against fraudulent crypto activities, including issuing subpoenas to crypto exchanges, filing lawsuits against blockchain companies, and warning investors about the risks of ICO scams. As the crypto industry continues to mature and expand, it will be increasingly important for regulators, investors, and industry players to work together to promote innovation, consumer protection, and trust in the market.

Conclusion

The sentencing of Michael Stollery to four years and three months in prison for a $21 million cryptofraud scheme is a significant milestone in the fight against crypto scams and frauds. It sends a strong message to bad actors in the industry that they will be held accountable for their illegal activities, and that justice will be served for the victims of their schemes.
As the crypto industry evolves and matures, it will be critical for all participants to maintain ethical and sound practices, and to work collaboratively to build a stronger, more transparent, and more trustworthy ecosystem. This will require ongoing education, regulation, and enforcement to ensure that bad actors are weeded out, and that the benefits of blockchain technology and cryptocurrencies can be realized by all.

FAQs

1. What was Michael Stollery’s sentence?
– Michael Stollery, the founder and CEO of Titanium Blockchain Infrastructure Services (TBIS), was sentenced to four years and three months in prison for engaging in a $21 million cryptofraud scheme.
2. What was the fraudulent ICO that Stollery conducted?
– Stollery conducted a fraudulent initial coin offering (ICO) in 2018, where he and his associates made false and misleading statements to potential investors about the company’s business and operations.
3. What was the SEC’s response to the TBIS ICO?
– In March 2018, the SEC obtained an emergency court order to halt the ICO, alleging that it was fraudulent and unregistered.

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