US SEC Halts Scam TBIS ICO with Emergency Court Order

The Titanium Blockchain Infrastructure Services has attracted USD 21 million by falsely claiming support from the Federal Reserve, PayPal, Walt Disney, Boeing.

by Marin Marinov
30 May • 3 min
In News

The US Securities and Exchange Commission (SEC) said on Tuesday it has obtained an emergency court order for temporary halting a scam Initial Coin Offering (ICO) of Titanium Blockchain Infrastructure Services (TBIS). The fraudulent scheme violated the US federal laws because of false statements of support from leading global companies that resulted in the sale of USD 21 million worth of TBIS own tokens, dubbed BAR.

“This ICO was based on a social media marketing blitz that allegedly deceived investors with purely fictional claims of business prospects,” Robert A. Cohen, chief of the SEC Enforcement Division’s Cyber Unit, said in a statement.

The Los Angelis federal district court also approved an asset freeze and the appointment of a receiver for the TBIS. All sections of the ICO website have not been working since early Wednesday morning (UTC) and it functions like a static home page.

The scheme

The Titanium Blockchain Infrastructure Services attracted investors by claiming that its project for new IT infrastructure has support from the Federal Reserve and from some of the biggest US companies like entertainment giant Walt Disney Company, payment system PayPal, aircraft manufacturer Boeing, e-commerce company eBay, agricultural corporation Cargill and IT giants IBM and Hewlett-Packard.

The alleged fraud resulted in USD 21 million purchase of BAR tokens from investors in and outside the United States.

“From just those investors who invested cash, at least 75 investors purchased BAR, including 18 who reside in the U.S. Because TBIS also accepted investments in the form of digital assets Ether, Bitcoin, Bitcoin Cash, Litecoin, and Dash, the total number of investors who purchased BAR is not known,” SEC explained in the court complaint.

TBIS and its president, Michael Alan Stollery, also known as Michael Stollaire, have been accused of violating antifraud provisions of federal securities laws. The company also did not have the obligatory Form D that covers offering securities in the form of digital assets.

one big coin

On May 22, SEC filed a court complaint for preliminary and permanent injunction, returns of money to investors and prohibition for Michael Stollaire to participate in digital securities offering in the future. The regulator also charges another Stollaire company linked to the ICO, EHI Internetwork and Systems Management Inc., with violating the antifraud provisions. The Los Angelis federal district court issued temporary injunction on May 29, pending final results from the SEC investigation, which is still ongoing.

“Investors in the Titanium ICO who believe they may be a victim should contact the SEC through www.SEC.gov/tcr,” the commission noted.

SEC recently launched a fake ICO for educational purposes, as well as several social media advertisements, informing US citizens about frauds in various investment projects.