Coinspeaker
Former BitConnect Promoter Convicted for 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 LossesBetween 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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