QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
$21 000 000 USD
MAY 2018
UNITED STATES
TITANIUM BLOCKCHAIN
DESCRIPTION OF EVENTS
"Welcome to the new world brought to you by Titanium Blockchain Infrastructure Services (TBIS). We Are the Revolution." "Our Pre-Sale has begun for The Titanium BAR Token. You can be a part of the revolution today!"
"Today, the largest transportation company in the world owns no cars (Uber), the largest hospitality company on the face of the planet owns no hotels (AirBnB), the largest retailer carries no stock (Alibaba), and the world’s most popular media network creates no content (Facebook). Clearly, we are living in a time of radical change. Why should internet infrastructure be any different?"
"Unlike 99.99% of Blockchain start-ups and Initial Coin Offerings (ICOs), the Titanium Core Team is not composed of relative newcomers to technology. In stark contrast, the Titanium Core Team has over two-hundred (200) years of combined experience. This is also not the first technology company that Titanium’s Founder and CEO, Michael Stollaire, has ever formed. In 1999, Mr. Stollaire founded EHI, a technology consultancy specializing in enterprise infrastructure management."
"EHI and its consultants are known in the industry as top-tier, elite personnel, as shown by their impressive Client List and Testimonials."
"Most Blockchain start-ups and ICOs face a very serious problem after they develop a viable product and or service: finding companies and people that will actually purchase them and use them."
"Titanium will not have this problem. As EHI’s sister company, Titanium will simply inherit EHI’s clientele, and since EHI is considered a trusted source of excellent customer service and personnel, Titanium will also be held in high regard."
"In the eyes and opinion of Mr. Stollaire, in fact, Titanium is an organic evolution of EHI, and should effectively be considered “EHI v2.0.”"
"What follows is a short excerpt of some of EHI’s customers, which Titanium will leverage immediately: Accenture, Apple, Applied Materials, Boeing, Cargill, Citizens Bank, eBay, Exelon, ERCOT, General Electric, Hewlett-Packard, Honeywell, IBM, Intel, Microsoft, PayPal, Pfizer, Santa Barbara Bank and Trust, Synchrony Financial, The Bank of Scotland in Ireland, The Federal Reserve Bank, The Royal Bank of Scotland, com, Universal Studios, Walt Disney"
"Just as steel changed the building industry forever, Titanium will usher in a new era of network construction. With TBIS’ proprietary Company as a Service™ (CaaS) and Infrastructure as a Service (IaaS), every device, from enterprise level on down, can be virtualized; routers, firewalls, and specialized equipment such as cryptocurrency miners, can exist in an entirely cloud-based environment based on the decentralized Ethereum blockchain. Paired with cutting-edge enterprise management and monitoring technology, this will create a shock-proof internet infrastructure that will be both lightweight and completely revolutionary in scope. Imagine being able to set up an enterprise level infrastructure for a global company from a tablet in your living room, without spending any time installing rack servers, routers, load balancers, or any other network component beyond what is needed to access the network."
"The distributed TBIS system will monitor the health of the network and everything attached to it, and execute autonomous “healing” actions when specific weaknesses are detected. With Titanium Hydra Fault Tolerance, if a device falters, TBIS will have already shifted load away and onto another network of redundant nodes. If a potential security problem arises, the TBIS system will work automatically to limit the potential impact of attacks such as DDoS or other address-specific attacks; it is impossible to overwhelm a piece of equipment that exists only on the ether."
"Unlike typical infrastructure services, where a company’s technology may exist on up to several hundred devices, the TBIS infrastructure will reside on the decentralized Ethereum blockchain, which is composed of over 20,000 nodes, with each node potentially being composed of several hundred discreet systems. Even if several thousand nodes experienced a system failure, there would still be zero outage time, and perhaps, only a performance degradation of the TBIS services being delivered."
"TBIS is at the forefront of the utilization of Blockchain technology across personal and enterprise networking systems. Read our whitepaper to see how you can take advantage of this new technology today!"
"Soon, the TBIS token (BAR) will be sold. As part of this sale, a fixed pool of BAR will generated. No further BAR will be created in the future. BAR will be a deflationary currency used within the Titanium Ecosystem. Once the sale concludes, a portion of BAR tokens will be allocated and given to the TBIS team as an incentive for the success of our platform, and a separate portion will be held as a reserve pool and expenditure fund. The Titanium Community will hold 60% of all BAR, the TBIS team will hold 20% of BAR (subject to a freeze period), 10% of BAR will be retained to be used for Titanium Community Bounties and 10% of BAR will be allocated for the reserve pool."
"Infrastructure as a Service (IaaS). With our proprietary IaaS structure, Titanium can create any piece of networked hardware on the blockchain through distributed computing."
"Desktop as a Service™ (DaaS). Gone are the days when you need to carry a computer around to access premier computing power. With Titanium’s Desktop as a Service, you can have your full-power computing environment anywhere you go."
"Company as a Service™ (CaaS). The Titanium Company as a Service package, you will be able to create a company and complete all legal steps with a click of a button."
"Instant ICO Incubator (III)™. Titanium Instant ICO Incubator™ will take the guesswork out your token launch through providing end-to-end launch services."
"Bring Your Own Cloud™ (BYOC). The Titanium Bring Your Own Cloud will allow you to create a truly private computing environment by leveraging a cryptographically secure device-based context to provide total privacy."
"Bleeding-Edge Encryption. All TBIS data is encrypted using state-of-the-art SHAKE256 Titanium Sponge Cryptographic Techniques."
"CryptoEscrow™. Leveraging the power of Ethereum smart contracts to facilitate Peer-to-Peer sales on the blockchain using any of the top-100 cryptocurrencies using TBIS Atomic Swaps."
"DEXchange™. Trade cryptocurrencies with other users on an entirely decentralized exchange (DEX). The top one-hundred (100) cryptocurrencies (or more) will be listed initially, along with the top twenty (20) fiat currencies globally."
"Michael Alan Stollery, 54, of Reseda, California, was the CEO and founder of Titanium Blockchain Infrastructure Services (TBIS)—a purported digital assets investment platform." "TBIS’s initial coin offering raised approximately $21 million from investors in the United States and overseas." "Between late November 2017 through at least January 25, 2018, [TBIS] succeeded in raising as much as $21 million in the form of various digital assets, such as Ether and Bitcoin, and cash from dozens of investors located in at least 18 states, including California, and abroad, who purchased BAR."
"Defendants employed a "create and inflate" scheme that enabled them to illegally profit both at the outset of the scheme (when raising money from investors through fraudulent statements in the ICO) as well as later (when continuing to make unsubstantiated claims in hopes of selling their own digital asset, BAR, at inflated values). Defendants' scheme entailed creating their digital asset for a newly conceived business; orchestrating a social media campaign based on false corporate relationships ~ and false testimonials to establish a presence and seeming expertise; generating demand for their digital asset by offering various incentives and creating urgency so investors would invest in the ICO; and, after conclusion of the ICO, inflating the value of the ~ digital asset, which was freely tradeable."
"The defendant falsified the white paper of TBIS, planted fake testimonials on the company’s website, and fabricated business relationships with the U.S. Federal Reserve Board and several other entities, including Apple." "The FBI and the Federal Reserve Board’s Western Region San Francisco Office [started] investigating the case. Fraud Section Trial Attorneys Kevin Lowell, Tian Huang, and Andrew Tyler [started] prosecuting the case."
On May 28th, 2018, "Titanium Blockchain Infrastructure Services [became] subject to a receivership order entered by the United States District Court for the Central District of California. The receivership order was part of a Temporary Restraining Order (TRO) issued in connection with an action filed by the U.S. Securities and Exchange Commission (SEC)." "Titanium has cooperated with, and fully intends to continue cooperating with the SEC’s investigation in accordance with the terms of the TRO. As is often the case, a receiver was appointed in this matter (Case No. 18-4315 DSF (JPRx)). Titanium’s receiver has just begun his efforts to identify assets of the company. He will work closely with the SEC and TBIS to achieve the best possible outcome for Titanium’s community of token holders, employees, and associates." "We leave you in the best possible hands and welcome the objectivity of our receiver and the SEC. Per instruction, and as usual, product development continues quietly in the background."
"Michael Alan Stollery, 54, of Reseda, California, was charged in an information filed in the Central District of California with one count of securities fraud. As alleged, in order to lure investors, Stollery falsified TBIS white papers (a document for prospective investors that typically explains how the technology underlying the cryptocurrency works and the purpose of the cryptocurrency project), planted fake testimonials on TBIS’s website, and fabricated purported business relationships with the U.S. Federal Reserve Board and dozens of prominent companies, including Apple Inc., Pfizer Inc., and The Walt Disney Company, to create the appearance of legitimacy."
“Those who fraudulently misrepresent their relationship with the Federal Reserve to deceive the public in cryptocurrency or other fraud schemes will be held accountable and brought to justice,” said Acting Special Agent in Charge Cory Nootnagel of the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, Western Region. “I commend our agents, their federal law enforcement partners, and the Justice Department’s Criminal Division’s Fraud Section for their hard work and persistence.”" "If convicted, Stollery could face up to 20 years in jail."
Titanium Blockchain Infrastructure Services (TBIS) was an initial coin offering run largely by Michael Stollery, which raised $21m from investors, largely on the basis of faking relationships with dozens of large companies such as Apple, Pfizer, Walt Disney, and even the Federal Reserve. As one of the primary challenges to any new business is the successful attraction of customers, and many businesses fail on this point. Having these large corporate customers lined up likely made a significant difference in the minds of prospective investors. The website also featured a large list of services which TBIS supposedly offered.
Ultimately, many of the corporations did not like their brand names used in this way, and asked that their brand be removed from the site. Many of the investors did not like this false representation and wanted their money back. At the same time, some of the invested funds appear to have been spent personally by Mr. Stollery. Titanium Blockchain Infrastructure Services entered bankruptcy, with a receiver being appointed over the remaining funds. The bankruptcy progress is continuing towards disbursement of the held funds, in either USD or Ethereum.
HOW COULD THIS HAVE BEEN PREVENTED?
The primary issue is the significant number of false statements issued in order to raise funds, and the lack of any verification into whether those statements are true or not. Another potential issue may have been the lack of controls on the funds, and the lack of visibility into the finances of the ongoing business.
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Justice Department Announces Enforcement Action Charging Six Individuals with Cryptocurrency Fraud Offenses in Cases Involving Over $100 Million in Intended Losses | OPA | Department of Justice (Jan 13)
https://tbis.io/ (Jan 20)
Titanium Blockchain Infrastructure Services – Our Commitment to Our Customers is to Make Their Infrastructure Stronger than Steel (Jan 20)
Titanium Blockchain (Jan 20)
Steemit (Jan 20)
Titanium Blockchain Infrastructure Receivership (Jan 20)
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-94.pdf (Jan 20)
SEC.gov | SEC Obtains Emergency Order Halting Fraudulent Coin Offering Scheme (Jan 23)
https://web.archive.org/web/20221207143329/http://tbis.io/ (Jan 23)
https://web.archive.org/web/20220525070717/https://tbis.io/ (Jan 23)
https://web.archive.org/web/20211226131203/http://tbis.io/ (Jan 23)
https://web.archive.org/web/20210212182038/http://tbis.io/ (Jan 23)
Titanium Blockchain Infrastructure Receivership (Jan 23)
Titanium Blockchain Infrastructure Receivership (Jan 23)
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SEC Stops Titanium ICO, But After Defrauding Investors out of $21 Million. Titanium falsely claimed that it had signed big names as future contacts including PayPal, Boeing, and Walt Disney. : CryptoCurrency (Oct 17)
SEC Stops Titanium ICO, But After Defrauding Investors out of $21 Million | Finance Magnates (Aug 23)
Worldwide crypto & NFT rug pulls and scams tracker - Comparitech (Dec 15)
