The Securities and Exchange Commission alleged that the blockchain startup Titanium Blockchain Infrastructure Services (TBIS) and its president Michael Stollaire violated federal securities laws in a $21 million fundraiser.

TBIS and Stollaire allegedly promoted fake business relationships with companies like Apple and Disney.

The SEC has also alleged that Stollaire used part of the ICO funds to pay off personal credit cards and bills on his condo in Hawaii.

TBIS president Michael Stollaire allegedly used proceeds from the $21 million ICO to pay bills on his personal condo in Hawaii. LinkedIn

The US Securities and Exchange Commission (SEC) has charged another blockchain startup with a fraudulent initial coin offering months after it raised $21 million from investors around the world.

Titanium Blockchain Infrastructure Services (TBIS) raised its millions in the cryptocurrency fundraising technique known as an initial coin offering (ICO). The SEC alleges that this money was raised between November 2017 and January 2018 using fraudulent claims.

“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's Cyber Unit.

The SEC's complaint, filed on May 22 and unsealed on Tuesday, alleges that TBIS and its president Michael Stollaire made false statements and fabricated testimonials in order to gain investors trust.

During that time, Stollaire claimed to have business relationship with well-known companies such as PayPal, Apple, The Walt Disney Company and the Federal Reserve, according to the SEC.

Stollaire allegedly used proceeded from the ICO to pay off personal credit cards and pay bills on a his condominium in Hawaii.

The SEC announced Tuesday that it obtained a court order to halt the Titanium ICO as well as an emergency asset freeze.

Charges against TBIS come as the government ramps up its efforts to regulate cryptocurrency and blockchain companies, while putting an end to fraud in the space.

In April, three founders behind the cryptocurrency credit card company Centra were charged and arrested on allegations of fraud after raising $32 million in an ICO.

Stollaire could not immediately be reached for comment.