TLDR
- John Bigatton, an Australian promoter of BitConnect, was convicted for providing unlicensed financial advice.
- Bigatton was sentenced to a three-year recognizance of good behavior and disqualified from managing corporations for five years.
- BitConnect was a cryptocurrency platform that promised high returns to investors.
- Bigatton promoted BitConnect through seminars and social media between August 2017 and January 2018.
- The Australian Securities and Investments Commission (ASIC) had previously banned Bigatton from providing financial services for seven years in 2020.
John Bigatton, an Australian promoter of the now-defunct cryptocurrency platform BitConnect, has been convicted by the Sydney District Court for providing unlicensed financial advice.
The court handed down its decision on Friday, July 12, 2024, sentencing Bigatton to a three-year recognizance of good behavior and disqualifying him from managing corporations for five years.
The case against Bigatton focused on his activities between August 2017 and January 2018, when he promoted BitConnect through seminars and social media.
During this time, Bigatton provided financial advice without proper authorization, a violation of Australian financial regulations.
BitConnect, founded in 2016, was a cryptocurrency exchange platform that created its own digital token called BitConnect Coin (BCC). The platform allowed investors to exchange Bitcoin for BCC and participate in various investment opportunities.
BitConnect promised high returns to investors, with Bigatton claiming at one seminar that BCC would increase in value from $253 to at least $1,000 over one year.
The Australian Securities and Investments Commission (ASIC) played a key role in bringing the case against Bigatton.
ASIC Deputy Chair Sarah Court stated, “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 the first time Bigatton has faced regulatory action. In 2020, ASIC banned him from providing financial services for seven years.
In 2018, ASIC successfully applied to the Federal Court to freeze Bigatton’s assets, including his cryptocurrency holdings. This marked the first time an Australian regulator obtained freezing orders over digital assets.
The case against Bigatton highlights the ongoing scrutiny of cryptocurrency-related financial activities. In 2021, the U.S. Securities and Exchange Commission (SEC) sued BitConnect’s founder, Satish Kumbhani, for allegedly raising about $2 billion fraudulently from retail investors. As of 2024, Kumbhani’s whereabouts remain unknown.
Despite Bigatton’s disclaimers stating that his advice was not financial, the court determined that the substance of his actions constituted financial advice.
At seminars, Bigatton claimed that BitConnect was superior to traditional term deposits and made optimistic predictions about the value of BitConnect Coins.
The BitConnect platform required investors to acquire BitConnect Coin to participate in its investment opportunities. Investors could invest or loan BCC for set periods in return for promised high interest rates.
However, once invested, they had no control over their loans and could not withdraw their capital until the lending period ended.
Bigatton pleaded guilty to one count of providing unlicensed financial advice in May 2024. The conviction comes after a series of legal proceedings, including the ongoing case in the Supreme Court of New South Wales, now overseen by the Australian Federal Police under the Proceeds of Crime Act.
