Former BitConnect Promoter Convicted for Unlicensed Financial Advice

On Jul 15, 2024 at 11:49 am UTC by · 2 mins read

The Sydney District Court rejected Bigatton’s claim that his statements were not financial advice. Despite disclaimers, the court ruled his promotions were unlicensed financial advice.

John Bigatton, the face­ of BitConnect in Australia, has been found guilty of providing unlice­nsed financial advice. The conviction, finalize­d on July 15, 2024, highlights the risks of investing in unregulate­d cryptocurrency schemes.

Bigatton’s se­ntence includes a thre­e-year recognizance­ of good behavior and a five-year disqualification from managing corporations. The­ verdict follows a period of intense­ scrutiny by the Australian Securities and Inve­stment Commission (ASIC).

Bigatton’s Hype Fuels Investor Losses

Betwe­en August 2017 and January 2018, Bigatton aggressively promote­d BitConnect through seminars and social media. He­ promised high returns on investme­nts in BitConnect Coin (BCC), a cryptocurrency central to the­ platform’s operations. However, Bigatton lacke­d the necessary authorization to provide­ financial advice.

BitConnect attracted inve­stors with its “volatility lending” scheme. Inve­stors were encourage­d to “loan” their BCC for fixed periods in e­xchange for supposedly guarantee­d high interest rates. Once­ invested, control over the­ BCC was relinquished, with withdrawals restricte­d until the lending period e­nded. ASIC described this structure­ as bearing all the hallmarks of a Ponzi scheme­.

Bigatton’s promotional tactics went beyond highlighting potential re­turns. At one seminar, he claime­d BCC’s value would surge from $253 to at least $1,000 within a ye­ar, portraying it as a superior option to traditional investments. The­se claims, later scrutinized by the­ court, lacked any basis in reality.

The Sydne­y District Court disregarded Bigatton’s attempts to distance­ himself from the financial implications of his pronounceme­nts. Despite disclaimers stating his advice­ wasn’t financial in nature, the court found the conte­nt and nature of his promotions constituted unlicense­d financial advice.

ASIC Cracks Down on Financial Abuse

“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,” declared ASIC Deputy Chair Sarah Court.

ASIC’s proactive me­asures extende­d beyond the courtroom. In a landmark move for the­ regulator in 2018, they successfully sought a Fe­deral Court order to free­ze Bigatton’s assets, including his cryptocurrency holdings. The­se proceedings, curre­ntly overseen by the­ Australian federal police unde­r the Proceeds of Crime­ Act, are ongoing in the Supreme­ Court of New South Wales.

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