SEC charges cryptocurrency company that raised $21 million with fraud

SEC charges cryptocurrency company that raised $21 million with fraud
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The Securities and Exchange Commission (SEC) on Tuesday announced that it is suing the blockchain company behind a $21 million initial coin offering (ICO) for fraud.

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The agency also received court approval to freeze the assets of Titanium Blockchain Infrastructure Services Inc., the company running the alleged scheme.

Titanium President Michael Alan Stollery, whom the SEC is also suing, allegedly lied about having business relationships with the Federal Reserve and many high-profile companies, such as PayPal, Verizon, Boeing and The Walt Disney Company.

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

“Having filed multiple cases involving allegedly fraudulent ICOs, we again encourage investors to be especially cautious when considering these as investments,” he added in a statement.

The action is a part of the SEC’s efforts to ramp up enforcement against fraudulent ICOs that have tried to take advantage of investors. The agency began keeping a close eye on cryptocurrency and companies offering ICOs tied to such digital assets late last year, after Bitcoin exploded in value.

Last week, state regulators also announced their own push to crack down on predatory cryptocurrency scams.