Former Bitconnect Promoter Convicted for Unauthorized Services in Australia

July 15, 2024 Blockchain

The Australian Securities and Investments Commission (ASIC) has successfully prosecuted a former Bitconnect promoter for offering unauthorized financial services. This landmark case highlights the increasing scrutiny of cryptocurrency operations by regulatory authorities across the globe.

John Louis Anthony Bigatton, a 52-year-old resident of New South Wales, was found guilty on four charges of providing unlicensed financial product advice. He was also convicted of one count each of carrying on a financial services business without holding an Australian Financial Services (AFS) license and managing a scheme without holding an Australian Credit License.

Bitconnect was a high-yield cryptocurrency investment Ponzi scheme discovered in 2016, promising high rates of return to its investors. Bigatton served as the Australian National Representative of Bitconnect from August 2017 until January 2018. Bitconnect collapsed in January 2018, causing investors to lose more than $1 billion.

Bigatton was found to have provided advice and dealt in relation to Bitconnect Lending and the Bitconnect Exchange, two parts of the Bitconnect platform. He also ran seminars and meetings about cryptocurrencies and Bitconnect, promoting the scheme to potential investors.

The ASIC further found that Bigatton operated an unregistered managed investment scheme, known as the Bitconnect Lending Platform, from which he made profits. He is said to have attracted investments of around $2.6 million through this platform.

The conviction comes as part of a broader crackdown on cryptocurrency scams by the ASIC. The regulator has been vigilant in its mission to protect consumers from unauthorized and potentially harmful financial services.

Bigatton's sentencing is scheduled for September 2022. The maximum penalty for operating an unlicensed financial services business in Australia is two years imprisonment, a fine of $42,000, or both. For providing unlicensed financial product advice, the maximum penalty is five years imprisonment, a fine of $36,000, or both. For operating an unmanaged scheme, the maximum penalty is five years imprisonment, a fine of $46,000, or both.

The conviction of Bigatton serves as a warning to other potential cryptocurrency scam operators, demonstrating the ASIC's commitment to prosecuting those who flout financial regulations. It also underlines the need for potential investors to be cautious when investing in cryptocurrencies and to ensure that any investment advice they receive is from a licensed provider.

Overall, this case serves as a reminder of the potential risks and regulatory implications associated with cryptocurrency investments. It further underlines the need for robust regulatory oversight in the fast-evolving cryptocurrency market to protect investors and maintain financial stability.

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