Australian Court Convicts Former BitConnect Promoter For Unlicensed Advice

The Australian Securities and Investments Commission (ASIC) announced on July 15 that John Bigatton, the Australian promoter of BitConnect, has been convicted by the Sydney District Court for providing unlicensed financial advice, violating section 911B(1) of the Corporations Act 2001.

Between August 2017 and January 2018, Bigatton promoted BitConnect through seminars and social media, claiming significant returns on BitConnect Coin investments. The court highlighted the breach of trust involved, noting that individuals promoting financial products must adhere strictly to legal requirements.

This conviction disqualifies Bigatton from managing corporations for five years, and he has been banned from providing financial services for seven years. Proceedings regarding his assets, frozen in 2018, are ongoing under the Proceeds of Crime Act.

The Australian Securities and Investments Commission (ASIC), on July 15, released a statement regarding the conviction of John Bigatton. The regulator said that Bigatton was released on a “recognisance to be of good behaviour for three years” after promoting BitConnect in Australia “in seminars and on social media” between late 2017 and early 2018.

ASIC Deputy Chair Sarah Court said, ‘Providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry.  ASIC is committed to taking action against the unlawful promotion of high-risk digital assets to protect Australian investors.’

‘This matter sends a clear message to Australians – that ASIC has and will act when unlicensed operators try to take advantage of Australian investors.’

This case is a reminder that many crypto assets are financial products under the current law and that services relating to them (including seminars and promotions) require an Australian financial services licence.

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About BitConnect

Founded in February 2016 to much fanfare, BitConnect, presented itself as a crypto lending platform, promising hefty payouts. BitConnect created a token called BitConnect Coin that could be exchanged for Bitcoin (BTC) to participate in the exchange’s investment opportunities.

As BitConnect’s operating model was widely questioned as a Ponzi scheme, the platform was plagued by negative press and received warnings and suspension orders from multiple regulators.

On January 3, 2018, Texas State Securities Board issued a cease and desist to the company, calling it a Ponzi scheme, and citing failings in user earnings transparency, and misleading statements. On January 17, 2018, BitConnect shut down

After the platform shut down, the price of BitConnect Coin crashed by 92% immediately and many investors suffered severe financial losses. According to statistics, the victims of the BitConnect Ponzi scheme involved thousands of people from inside and outside the United States, and lost more than $2 billion worth of bitcoins.

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About John Bigatton

John Bigatton is regarded to be one of the former promoters of BitConnect, or at least someone who played a major role in the platform’s operation. Together with others involved in the case, he attracted a large number of investors to the BitConnect platform through elaborating marketing strategies and false promises. However, as the Ponzi scheme began to surface, investors began to realize that they might not get their money back, leading to a series of legal actions and regulatory investigations.

On 11 December 2018, ASIC successfully applied to the Federal Court to freeze Mr Bigatton’s assets, including his crypto assets.  The total value of assets frozen was in the millions.  This was the first time ASIC obtained freezing orders over digital assets.  ASIC’s proceedings were discontinued in March 2020 and proceedings were commenced by the Australian Federal Police who obtained freezing orders over John Bigatton’s property under the Proceeds of Crime Act.  These proceedings remain ongoing in the Supreme Court of New South Wales.

As a result of his conviction, John Bigatton is disqualified from managing corporations for five years. On 1 September 2020, ASIC banned John Bigatton from providing financial services for seven years.

John Bigatton was charged over his conduct in relation to BitConnect in November 2020. He pleaded guilty to one count of providing unlicensed financial advice contrary to section 911B(1) of the Corporations Act on 16 May 2024.

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