President of TBIS Michael Stollaire has been accused of using funds from $21 million ICO to settle bills for a personal apartment in Hawaii. The blockchain startup was taken under scrutiny by the US Securities and Exchange Commission (SEC) for conducting a fraud Initial Coin Offering that raised $21 million from investors around the world.
The company is named Titanium Blockchain Infrastructure Services (TBIS) and is currently facing universal heat due to the improper use of the funds collected through the ICO. SEC has claimed that TBIS used misleading information to raise the money between November 2017 and January 2018.
Chief of Cyber Unit SEC, Robert A. Cohen said, “This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictional claims of business prospects.” A complaint was filed by SEC on May 22 which complaints about the immoral and fabricated measures used by TBIS and Michael Stollaire to gain the trust and attention of innocent investors.
SEC further informed that Stollaire falsely claimed to have positive relations with popular companies like Apple, PayPal, Walt Disney Company and the Federal Reserve. He is also charged with misusing investor’s money to pay bills for a condo in Hawaii and the asking of his personal credit cards. SEC was successful in obtaining a court order to terminate Titanium’s ICO and immediately freeze the assets of the company. The strict action against TBIS is another example of government’s outlook towards digital currencies/ blockchain and its attempts for minimizing fraud in the crypto space.
In a similar news crypto-based, startup Centra was accused by SEC in relation to the $32 million raised in September 2017 through an ICO. Ray Trapani, the founder of the company, was charged with civil and criminal charges by SEC on Friday. Earlier in the case, Robert Farkas and Sam Sharma, co-founders of Centra, has been arrested by criminal authorities for conducting a fraud ICO.
Robert A. Cohen said, “We allege that the Centra co-founders went to great lengths to create the false impression that they had developed a viable, cutting-edge technology. Investors should exercise caution about investments in digital assets, especially when they are marketed with claims that seem too good to be true.”
The country has been plagued by many instances of fraud ICOs and Ponzi crypto schemes that have duped millions of investors till now. Crypto exchanges have faced security issues and hacking incidents considering the use of the acclaimed blockchain technology. It should also be noted that bitcoin is showing hints of gradual growth which can multiply the efforts of online scammers. Experts have predicted that bitcoin will likely surpass the $20,000 mark by the end of the year.
Cryptocurrencies, on the whole, have become an aspect of serious considerations around the world. Until governments are not able to come up with clear and strict policies investors will be going through a ruckus. People interested in crypto are advised to stay clear of promises that seem too good to be true and invest only in a project that has authentic standings.
