US Capitol Building, Washington DC, USA
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The man behind an unregistered initial coin offering (ICO) that took US$21 million from investors has pled guilty to securities fraud.

Last month, the U.S. Department of Justice (DoJ) charged the CEO of Titanium Blockchain Infrastructure Services Inc. (TBIS), Michael Alan Stollery, for his role in a crypto fraud scheme involving an unregistered ICO that falsely claimed to have business arrangements with the U.S. Federal Reserve Board, along with various mainstream companies, including several banks.

In 2018, the U.S. Securities and Exchange Commission (SEC) sought an asset freeze order against the unregistered ICO scheme.

In response, a U.S. district court granted emergency relief, including a temporary restraining order and asset freeze.

On July 25, the DoJ announced that Stollery pled guilty to one count of securities fraud.

According to the DoJ, Stollery admitted that he falsified aspects of the ICO’s disclosure to investors, posted fake testimonials on its website, and falsely claimed to have business relationships with the Fed and various companies.

“Stollery further admitted that he did not use the invested money as promised but instead commingled the ICO investors’ funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments and the payment of bills for Stollery’s Hawaii condominium,” the DoJ said.

He is scheduled to be sentenced on Nov. 18.