The SEC’s Division of Enforcement released its annual report last week. The comprehensive 45-page document covers a variety of topics including cryptocurrencies and ICOs. On page 15 of the report, the SEC outlines a few “noteworthy enforcement actions,” one of which pertains to a blockchain project called Titanium that was charged with ICO fraud.
Details regarding the nature of Titanium’s civil lawsuit can be found here. At the moment, the SEC’s investigation into Titanium is still ongoing, but a preliminary injunction was obtained based on the following complaint.
Titanium President Michael Alan Stollery, a/k/a Michael Stollaire, lied about business relationships with the Federal Reserve and dozens of well-known firms, including PayPal, Verizon, Boeing, and The Walt Disney Company. The complaint alleged that Titanium’s website contained fabricated testimonials from corporate customers and that Stollaire publicly — and fraudulently — claimed to have relationships with numerous corporate clients. The complaint alleged that Stollaire promoted the ICO through videos and social media and compared it to investing in “Intel or Google.”
Substratum’s Similarities with Titanium
Like Titanium, Substratum also lied about business relationships and clients. Thanks to the magic of the Internet, we can go back in time to take a look at Substratum’s pre-ICO website. As you can see, the website lists Apple, Facebook, HP, Disney, the NBA, OpenStack, and Kodak as “current and past clients” of Substratum.
Substratum’s fake “current & past clients”.
Substratum does not have business relationships with any of these companies. How do we know? These world-class businesses don’t need anything from Substratum because Substratum doesn’t have anything to offer. Furthermore, Substratum’s redesigned post-ICO website does not display these clients anywhere. Now, ask yourself why a crypto project looking to raise millions of dollars in an ICO would claim to have Apple and Facebook as clients, but then proceed to remove all traces of these partnerships after a successful ICO. There is only one answer, and it’s a simple one. Substratum knowingly advertised these fake clients to generate ICO hype targeted towards novice investors. 2017 was an absolutely insane year for ICOs, and I can totally see how an inexperienced investor could stumble upon Substratum’s website and think, “Wow, these guys are already working with Disney and Apple. What a great investment!”