Titanium Blockchain chief executive Michael Stollery has been handed a four-year prison sentence for his involvement in a 2018 initial coin offering scandal that left investors $21 million out of pocket.
Stollery, who founded Titanium Blockchain Infrastructure Services (TBIS), was a central figure in what the U.S. Department of Justice has called a “cryptocurrency fraud scheme.”
The scheme revolved around an ICO for TBIS that took place between late 2017 and early 2018, and the Titanium Blockchain big boss was instrumental in its orchestration.
The case is just the latest example of the authorities cracking down on fraudulent cryptocurrency schemes and underscores the need for vigilance among investors.
Titanium Blockchain Fraudulently Raises $21 Million
According to a complaint filed by the U.S. Securities and Exchange Commission in 2018, Stollery faced allegations of various wrongdoings related to the ICO, including failing to register it with the regulator.
As per the DOJ, investors had invested in BARs, a cryptocurrency token, to participate in the ICO, which raised around $21 million from the U.S. and overseas. Stollery admitted to intermingling the funds raised from ICO investors with his own and using a portion of it to cover his personal expenses, such as credit card bills and Hawaii condominium payments.
The SEC also revealed that he falsified whitepapers and testimonials and made false claims of business associations with the U.S. Federal Reserve to deceive investors about TBIS’ credibility and profit potential.
In July 2022, he pleaded guilty to securities fraud, and despite facing up to 20 years behind bars, he was sentenced to four years and three months in prison for his involvement in the fraudulent scheme.
Michael Stollery Case Highlights Constant Threat Of Crypto Fraud
The Titanium Blockchain CEO’s sentencing highlights the issue of cryptocurrency fraud, which has become a growing concern in recent years.
According to a report by the Federal Trade Commission, Americans lost over $1 billion to fraud involving cryptocurrencies from January 2021 through March 2022,
Crypto fraud can take many forms, from Ponzi schemes to fake ICOs and fraudulent investment opportunities. The victims are often lured by the promise of high returns, but in reality, they end up losing their entire investment.
Crypto total market cap currently at $1.12 trillion on the daily chart at TradingView.com
As the crypto market continues to gain popularity and mainstream adoption, more people are at risk of being duped by these fraudulent schemes.
In response to this growing threat, regulators are stepping up their efforts to combat crypto fraud. The SEC has launched multiple investigations into ICO scams, resulting in several high-profile cases like that of Stollery’s.
The agency has also issued warnings to investors about the risks of investing in cryptocurrencies.
-Featured image from Gokhshtein Media