SEC Stops Titanium ICO, But After Defrauding Investors out of $21 Million

The US Securities and Exchange Commission (SEC) has obtained a court ‎order halting an allegedly fraudulent Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco Read this Term), which ‎has raised up to $21 million from thousands of investors‎ in the U.S. and ‎abroad.‎

According to the SEC’s complaint filed in Los ‎Angeles court on May 22, Titanium Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term used social media, fabricated testimonials, and other dissemination ‎tactics to raise what it claims to be over $20 million of its $35 million ‎goal. The company did this in a matter of three months, from December 2017 to March 2018. ‎

Titanium Blockchain was touted as a new blockchain-based ‎platform that is aiming to create the decentralized version of services such ‎as Amazon Web Services, Rackspace, and Microsoft Azure.‎

However, the startup announced in February that a massive amount of ‎BAR tokens has been stolen from the wallets of the company. The ‎price of the original token has dropped by up to 95 percent, and exchanges ‎have halted trade with the tokens.‎

The SEC obtained an emergency asset freeze against Titanium and filed ‎charges against its founder Michael Stollaire, alleging that he sold securities ‎claiming that investments in BAR tokens would bring highly secure ‎distributed solutions and applications.‎

The SEC alleges that Titanium falsely claimed that it had signed big names ‎as future contacts including PayPal, Verizon, Boeing, and The Walt Disney ‎Company. ‎

According to the order, in the course of the offering, the company and other promoters emphasized that investors could expect that efforts of the company and others would lead to an increase in the value of the tokens.

Titanium’s case is the latest to be brought by the SEC’s new cyber unit, ‎which was created in September to target violations involving distributed ‎ledger technology and initial coin offerings as part of a new effort to fight ‎cyber-crime.‎

Mock website to highlight ICO risks

The US top regulator has repeatedly warned investors against throwing money into the ‎crowdsale because the company intended to launch a cryptocurrency-based ‎‎investment scheme without even attempting to follow US securities laws.‎

Earlier this month, the SEC’s Office of Investor Education and Advocacy (OIEA) has created a ‎bogus ‎initial coin offering (ICO) website that advertises a ‘too good to be’ ‎true ‎investment opportunity. The regulator said it wants to explain that as ‎with ‎many other hyped markets, scammers are never far behind in trying ‎to ‎take advantage of cryptocurrency-based schemes.‎

Commenting on the news, Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit, said: “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.”