Michael Alan Stollery, the CEO, and founder of Blockchain Infrastructure Services Inc. (TBIS) have been sentenced to four years and three months in prison for his involvement in a multi-million dollar cryptocurrency fraud scheme. The United States Department of Justice (DOJ) revealed that TBIS raised approximately $21 million from investors in the United States and overseas for the “BARs,” the cryptocurrency token or coin offered by TBIS’s initial coin offering (ICO), using false and misleading statements.
Stollery was found guilty of securities fraud and admitted to using some of the invested money for personal purposes. This development comes at a time when Americans are increasingly losing their money to cryptocurrency investment schemes.
False and Misleading Statements Used to Raise $21 Million
Stollery did not register the ICO with the United States Securities and Exchange Commission (SEC), nor did he have a valid exemption from the Commission’s registration requirements, according to the DOJ. He falsified documents to hype up the legitimacy of his company, including TBIS’s white papers, which were supposed to give investors and prospective investors a description of the cryptocurrency investment offering.
These white papers were used to mislead investors about the “purpose and technology behind the offering,” how it was different from other cryptocurrency opportunities, and the “prospects for the offering’s profitability.” Stollery also made fake client testimonials on TBIS’s website and claimed to have connections with the Federal Reserve and several other prominent companies to “create the false appearance of legitimacy.”
Invested Money Used for Non-Business-Related Expenses
The DOJ stated that Stollery did not use the invested money for its intended purpose. Instead, he commingled the ICO investors’ funds with his personal funds and used part of the offering proceeds for expenses such as credit card payments, and the payment of bills for his Hawaii condominium. This is a clear violation of investors’ trust, as they expected their funds to be used for the development of TBIS’s cryptocurrency platform and the associated technologies. Instead, Stollery used the funds for his personal expenses.
Americans Losing Billions of Dollars to Cryptocurrency Investment Schemes
The cryptocurrency market has been subject to numerous fraud and scam schemes in recent years. According to a report by the Federal Bureau of Investigation (FBI), criminals stole a whopping $2.5 billion from U.S. citizens through these schemes last year. This indicates that investors need to exercise extreme caution when investing in the cryptocurrency market. The lack of regulation in this market makes it difficult for investors to distinguish between legitimate and fraudulent investment opportunities.
Investors need to perform due diligence and thoroughly research any investment opportunities in the cryptocurrency market. This includes researching the company behind the investment opportunity, understanding the technology behind the cryptocurrency, and determining whether the investment is registered with the SEC. Additionally, investors should be wary of investment opportunities that promise high returns with little or no risk. These investment opportunities are likely too good to be true and may be fraudulent.
Conclusion
Michael Alan Stollery, the CEO, and founder of Blockchain Infrastructure Services Inc. (TBIS) have been sentenced to four years and three months in prison for his involvement in a $21 million cryptocurrency fraud scheme. Stollery used false and misleading statements to raise money from investors and used the funds for personal expenses instead of developing TBIS’s cryptocurrency platform. This case highlights the need for investors to exercise caution when investing in the cryptocurrency market and to thoroughly research any investment opportunities before investing.
