Crypto Company Founder Receives Long Sentence for Fraudulent ICO
Michael Stollery, the CEO of Titanium Blockchain Infrastructure Services (TBIS), has been sentenced to four years in prison for his role in a fraudulent initial coin offering (ICO) that defrauded investors of $21 million in 2018.
Investors had invested in BARs, a cryptocurrency token, to participate in the ICO, which raised around $21 million from the US and overseas. Stollery faced allegations of various wrongdoings related to the ICO, including failing to register it with the regulator.
The US Securities and Exchange Commission (SEC) filed a complaint against Stollery in 2018, accusing him of falsifying whitepapers and testimonials and making false claims of business associations with the US Federal Reserve to deceive investors about TBIS’ credibility and profit potential.
Stollery admitted to intermingling the funds from ICO investors with his own and using a portion to cover his expenses, such as credit card bills and Hawaii condominium payments.
This case 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 promise of high returns often lures the victims, but they lose their entire investment.
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 high-profile cases like Stollery’s.