Titanium Blockchain CEO Pleads Guilty to Fraud

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Michael Alan Stollery pleaded guilty to one count of securities fraud related to a $21 million initial coin offering

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Prosecutors alleged that Mr. Stollery, as the founder and CEO of crypto investment platform Titanium Blockchain, lured investors to purchase “BARs,” a crypto coin issued by his firm, through false and misleading statements.

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Mr. Stollery allegedly falsified white papers that explained how the underlying technology for the cryptocurrency works, planted fake testimonials on a company website and made up business relationships to attract potential investors for his company’s initial coin offering. Between November 2017 and at least January 2018, he raised about $21 million from investors in the US and abroad, the Justice Department said.

Mr. Stollery also didn’t register his firm’s ICO with the US Securities and Exchange Commission as required by law, the DOJ said.

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In an ICO, a cryptocurrency company sells digital tokens or “coins” to raise money.

The guilty plea comes after the SEC in 2018 obtained an emergency order halting Titanium Blockchain’s ICO. The court at the time also approved an emergency asset freeze and the appointment of a receiver to hold the firm’s assets. The SEC alleged that Mr. Stollery lied about business relationships with the Federal Reserve and with many well known companies such as PayPal Holdings Inc. and Verizon Communications Inc.

Andrew Holmes, a lawyer who represents Mr. Stollery, said the plea was the criminal follow-up to the SEC action. Mr. Holmes said in a call that Mr. Stollery had intended to run Titanium Blockchain as a legitimate business, but “it was overexuberance that went beyond what he should’ve done.”

Mr. Holmes said most of the funds that were converted to crypto are in the possession of the receiver and that Mr. Stollery has cooperated with the authorities from the beginning of the case.

“He’s very remorseful and he wants to get as much money as possible back to those that put their money in,” Mr. Holmes said.

Mr. Stollery is currently out of custody on a signature bond, according to Mr. Holmes, and is scheduled to be sentenced on Nov. 18. He faces up to 20 years in prison, the Justice Department said.

Write to Mengqi Sun at [email protected]

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Credit: www.Businesshala.com /

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