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Titanium Blockchain CEO Pleads Guilty to $21M Fraud

Artem Bogdanov by Artem Bogdanov
August 24, 2022
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Titanium Blockchain CEO Pleads Guilty to $21M Fraud
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When Titanium Blockchain Infrastructure Services Inc. (TBIS) appeared, it referred to itself as a research, development, and consulting company that offered blockchain development services. It focused on exposing corporations to beneficial blockchain technology and offered an extensive roadmap that included planning, product architecture, and more.

However, while the Tel Aviv-based firm seemed legitimate, there was a lot going on behind the scenes. It all came to a head with an initial coin offering (ICO) in 2018, which raised a total of around $21 million in funding from investors both in and outside of the US.

That is when the SEC stepped in, filing a complaint and freezing assets and other relief involving the ICO. The complaint targeted Titanium Blockchain’s CEO, Michael Alan Stollery, a/k/a Michael Stollaire.

According to the SEC, he lied about business relationships with over 30 entities to get more funding, including relationships with the Federal Reserve, PayPal, and The Walt Disney Company.

The lies were used in a social media marketing blitz that deceived investors with functional business prospects. The campaign included videos and social media that compared investing in the ICO to investing in “Intel or Google.”

But the scheme involved more than lies about relationships. Titanium Blockchain also falsified testimonials from corporate customers to use on its website. It looked to create the illusion of credibility, which further contributed to duping investors.

Stollery’s efforts drove demand for the digital asset during the ICO because of the big brands that were claimed to be partners. People did not want to miss out, and combined with the incentives dangled in front of them, many investors took part.

It wasn’t until July 2022 that Stollery pleaded guilty to his role in the fraud scheme. At that time, he admitted to falsifying aspects of TBIS’s white papers to entice investors. The misleading information included an explanation of the crypto investment offering, which included the technology and purpose behind it, and its profitability.

Stollery also admitted to using fake testimonials and lying about the dozens of business relationships that brought the ICO credibility. But that wasn’t everything. He went on to admit that the invested money was not used for its intended purpose.

The investor funds were reportedly mixed with his own money, with some of it being used to pay personal expenses unrelated to TBIS. The unrelated expenses include things like personal credit card payments and bills for his Hawaii condo.

The charge Stollery pleaded guilty to was a single count of securities fraud, which he is scheduled to be sentenced for in November. At that time, a federal district court judge will determine his sentencing, with Stollery potentially facing 20 years in prison.

While there have been successful actions to try to get money back to the defrauded investors, it is unlikely that the full amount will be returned.

The entire case just proves the importance of being careful with investments. That is particularly true in the crypto realm, with cryptocurrency fraud schemes and crypto-related lawsuits popping up on a regular basis.

Spencer Hulse is a news desk editor at Grit Daily News. He covers startups, affiliate, viral, and marketing news.

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