The U.S. Securities and Exchange Commission announced on Tuesday that it has obtained a court order requiring the immediate cessation of what it calls the “ongoing fraud” conducted by Titanium Blockchain Infrastructure Services Inc. (TBISINC). Titanium, which raised $21 million USD during its ICO, was led by self-proclaimed blockchain evangelist Michael Alan Stollery. The well-known blockchain enthusiast is more widely known as Michael Stollaire.
Emergency Move Dents Titanium
The SEC alleges the ICO and the ongoing activities of TBISINC misled investors in the United States and abroad with false claims about its ties with the Federal Reserve and high-profile corporations like Disney, Boeing, PayPal, and Verizon.
The commission’s filing with the Central District of California Court argues that TBISINC, EHI Internetwork and Systems Management, Inc. (EHI), and Stollaire executed a “create and inflate” scheme wherein they illegally profited from fraudulent claims during the ICO, and continued to profit unlawfully by promoting their BAR tokens using false and misleading language in social media campaigns. The complaint names Stollaire and the two companies as defendants.
“This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictional claims of business prospects. Having filed multiple cases involving allegedly fraudulent ICOs, we again encourage investors to be especially cautious when considering these as investments.”
The SEC recently created a prank ICO to educate investors about the risks of investing in initial coin offerings.
Titanium’s Charm Offensive Failed to Impress “Partner” Companies
The SEC filing claims that Titanium received cease and desist letters from a number of the companies it claimed to have relationships with. In at least one instance, Stollaire reportedly told a representative of a company Titanium falsely announced a relationship with that “I did not know that a procedure would need to have been followed.”
Having removed a number of company logos from the Titanium website, the group replaced named entities with accounts of meetings Stollaire had with representatives of “billion-dollar companies” in emerging non-U.S. markets. The current legal action would cast some doubt on those claims.
The complaint further alleges that the TBIS and EHI websites published fictitious testimonials. Some testimonials were unauthorized, others were falsely attributed to people who no longer worked at the company, and others still were made by people with fake names and titles, the SEC claims.
Titanium Shuttered, Stollaire’s Crypto Days Numbered
Titanium has released a tweet acknowledging the legal action it now faces – which it refers to as “rumor and speculation” – claiming to be working on a formal response:
— TBIS Inc. (@TBISINC) May 29, 2018
In a move that now appears ill-fated for Pornhub’s partner currency, Stollaire returned late last year to the Verge Team as an ambassador:
— vergecurrency (@vergecurrency) November 11, 2017
Bitsonline has reached out to Stollaire and Titanium for a statement, but we are yet to receive a response. We have also approached Titanium’s Chief Communications Officer Martha Breed for an interview in Austin, Texas.
Stollaire and the two companies are prohibited from engaging in business activities pending the outcome of the hearing and an emergency freeze has been placed on all company assets. Bitsonline will continue to monitor this story as events unfold.
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