He's going from crypto "BARs" to prison bars.
Michael Alan Stollery, the CEO and founder of Titanium Blockchain Infrastructure Services, will be a guest of the federal government for the next four years and three months, the U.S. Department of Justice said on March 24.
Stollery, 54, of Reseda, CA was sentenced for his role in a crypto scheme involving TBIS’s initial coin offering that raised roughly $21 million from investors in the U.S. and overseas.
DON'T MISS: Coinbase Announces Very Bad News
Officials said that Stollery touted TBIS – a purported cryptocurrency investment platform – as a cryptocurrency investment opportunity, luring investors to purchase “BARs,” the cryptocurrency token offered by TBIS’s ICO, through a series of false and misleading statements.
Setting Up Social Media Presence
In August 20217, Stollery announced on his personal Twitter feed that “I just came up with a new idea for an Initial Coin Offering (ICO). Blockchain developers needed. Stay tuned,” according to court records.
He used social media to push TBIS as a start-up company seeking to develop an IT platform using blockchain technology, claiming that “just as steel changed the building industry forever, Titanium will usher in a new era of network construction, based on blockchain technology.”
Soon after establishing a social media presence, Stollery announced the creation of a new cryptocurrency token.
Stollery, who pleaded guilty last year, admitted he that mixed the ICO investors' money with his own funds and used a portion of the offering's proceeds for such things as credit card charges and paying bills for his Hawaii condominium.
In addition, he did not register the ICO regarding TBIS’s cryptocurrency investment offering with the Securities and Exchange Commission, nor did he have a valid exemption from the SEC’s registration requirements.
"TBIS intends to disrupt the current market leaders in the provisioning and virtualization space," one of the platform's white papers proclaimed.
Fake Client Testimonials
However, officials said that Stollery falsified aspects of TBIS’s white papers, which presented investors and prospective investors with an explanation of the cryptocurrency investment offering.
These explanations included the purpose and technology behind the offering, how the offering was different from other cryptocurrency opportunities, and the prospects for the offering’s profitability.
"Return on Investment (ROI) will be achieved far faster than with traditional cloud-based solutions," the white paper said.
Stollery also planted bogus client testimonials on TBIS’s website and falsely claimed that he had business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy.
Cryptocurrency has been plagued by a series of scandals. A report by Crystal Blockchain found that about $16.7 billion in cryptocurrencies has been stolen between January 2011 and February 2023.
The report said over $4.5 billion has been stolen through security breaches, more than $7.5 billion has been stolen through scams, and $4,81 billion taken through DeFi hacks.
Rug pulls, where fraudsters lie to attract funding and run off with investors' digital tokens, became very popular over the first half of 2023, the report said.
