American pleads guilty to organizing $21 million ICO fraud

Titanium Blockchain Infrastructure Services (TBIS) CEO Michael Alan Stollery pleaded guilty to participating in an ICO fraudulent scheme.which attracted about $21 million, the US Department of Justice reported.

According to court documents, a California residentfounded TBIS and promoted the platform as an «opportunity for investing in cryptocurrencies». Stollery lured investors into purchasing the ICO-offered BAR token through “a series of false and misleading statements.”

It also failed to register the coin offering as required by the US Securities and Exchange Commission (SEC).

Stollery admitted that he falsified aspects of the TBIS whitepaper, including the coin's purpose and staking technologies, differences from other tokens and profitability prospects. 

He posted fake customer reviews on the site and claimed to have business relationships with the Fed and dozens of well-known companies to give the project legitimacy.

«The founder of TBIS did not use the attractedassets, as promised, instead combined the funds of ICO investors with his personal ones. He used at least part of the money for his own expenses, such as credit card payments and condominium bills in Hawaii,” the press release says.

SEC takes legal action regarding TBIS activitiesin May 2018. The regulator filed claims against Stollery and his company for violating anti-fraud and federal securities laws.

The entrepreneur agreed to one count of securities fraud. The verdict will be announced on November 18, Stolleri faces up to 20 years in prison.

Recall that in May, SEC Chairman Gary Genslerstated that most cryptocurrencies fall under the jurisdiction of the department. The head of the institution announced tougher supervision of the industry and increased investor protection.

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