Titanium Blockchain under investigation by the US Securities and Ex...

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 US $ 21 million from investors in the US and abroad during its ICO, was led by self-proclaimed blockchain evangelist Michael Alan Stollery. Also know as Michael Stollaire.

At the SEC’s request, the U.S. District Court for the Central District of California also imposed an emergency asset freeze and the appointment of a receiver for the scheme’s creator Titanium Blockchain Infrastructure Services Inc.

The SEC claimed Titanium President Michael Stollery, used some of the $21 million USD to pay bills for his Hawaiian condominium.

At the core of the alleged fraud, according to the SEC, Titanium and a sister firm lied about business relationships with the Federal Reserve and dozens of well-known firms, including PayPal, Verizon, Boeing, and The Walt Disney Company.

While Titanium ran a graphic on its website with the logos of 24 well-know companies the firm boasted were clients of its IT services, none of them were.

When companies were sending letters to Stollery’s companies demanding they stop claiming the connections, he and Titanium Blockchain claimed a “malicious act” had stolen 16 million BAR digital assets, devaluing the ICO.

Stollery, who promoted himself as a blockchain evangelist, produced a social media marketing campaign in advance of BAR’s January 1 launch that included Facebook ads and YouTube videos.

Per Robert A. Cohen, head of the Cyber Unit of the SEC's Supervisory Division:

“This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictional claims of business prospects.”

On May 4, Titanium claimed a successor to BAR, TBAR, would be listed on a “well-known exchange” soon.

Ten days later, Titanium announced TBAR was trading on HitBTC.

The purported frauds by Stollery and his companies also included fake testimonials, one from a Federal Reserve “service delivery manager.”

In addition to temporary injunctions, the asset freeze, and the receivership, the SEC is seeking permanent injunctions, return of allegedly ill-gotten gains plus interest and penalties, and to prohibit Stollery from participating in offering digital securities in the future.

The alleged scheme ran from November through at least May 15, according to the SEC.