TLDR
- John Bigatton, a promoter of BitConnect in Australia, has been convicted of providing financial advice without a license.
- He has received a three-year good behavior bond and a five-year ban from managing corporations.
- BitConnect was a cryptocurrency platform that promised substantial returns to investors.
- Bigatton promoted BitConnect via seminars and social media from August 2017 to January 2018.
- In 2020, the Australian Securities and Investments Commission (ASIC) prohibited Bigatton from offering financial services for seven years.
John Bigatton, known for his role in promoting the now-defunct cryptocurrency platform BitConnect in Australia, has been convicted by the Sydney District Court for delivering financial advice without proper authorization.
The court’s ruling on July 12, 2024, resulted in a three-year recognizance of good behavior for Bigatton, along with a five-year disqualification from managing any corporations.
The case against Bigatton focused on his activities from August 2017 to January 2018, during which he held seminars and utilized social media to dispense financial advice, violating Australian financial regulations.
BitConnect, launched in 2016, was a cryptocurrency exchange platform that created BitConnect Coin (BCC).
Investors were enticed to trade Bitcoin for BCC and take part in various investment opportunities with promises of high returns. At one seminar, Bigatton boldly claimed that BCC’s value would skyrocket from $253 to over $1,000 within a year.
The Australian Securities and Investments Commission (ASIC) was pivotal in prosecuting Bigatton. ASIC Deputy Chair Sarah Court emphasized,
“Providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry.”
This conviction is not Bigatton’s first encounter with regulatory bodies. In 2020, ASIC barred him from offering financial services for seven years.
In 2018, ASIC successfully sought a Federal Court order to freeze Bigatton’s assets, including his cryptocurrency holdings. This was the first instance of an Australian regulator obtaining freezing orders over digital assets.
BitConnect’s operations and Bigatton’s promotion activities have drawn international scrutiny. In 2021, the U.S. Securities and Exchange Commission (SEC) charged BitConnect’s founder, Satish Kumbhani, with fraudulently raising about $2 billion from retail investors. Kumbhani’s current location remains unknown as of 2024.
Despite Bigatton’s assertions that his advice was not financial in nature, the court found that his actions indeed constituted financial advice. During seminars, he promoted BitConnect as a superior investment compared to traditional term deposits and made optimistic predictions about the future value of BitConnect Coins.
Investors in BitConnect were required to purchase BitConnect Coin to access investment opportunities. They could invest or loan BCC for set periods, with promises of high interest rates.
However, they had no control over their loans and could not withdraw their capital until the lending period ended.
Bigatton’s guilty plea in May 2024 to one count of providing unlicensed financial advice culminated in this conviction, following a series of legal proceedings.
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