The Sydney District Court has convicted John Bigatton, a prominent promoter of the now-defunct cryptocurrency exchange platform BitConnect. He was found guilty of providing unlicensed financial advice.
According to the Australian Securities and Investments Commission (ASIC), Bigatton promoted BitConnect through seminars and social media from August 2017 to January 2018. He did this without the necessary financial services license. As a result, he is disqualified from managing corporations for the next five years.
BitConnect was founded in 2016. It offered a digital token called BitConnect Coin, which could be exchanged for Bitcoin (BTC). Bigatton claimed in seminars that BitConnect was superior to traditional term deposits. He predicted the BitConnect Coin would reach at least $1,000.
ASIC Deputy Chair Sarah Court stated that the unlicensed financial advice provided by Bigatton undermines trust in Australia’s financial services industry.
In 2020, ASIC banned Bigatton from providing financial services for seven years. BitConnect’s founder, Satish Kumbhani, was sued in 2021 by the United States Securities and Exchange Commission (SEC) for fraudulently raising around $2 billion from investors. Despite the US District Court for the Southern District of California ordering the restitution of $17 million for the fraud victims, Kumbhani’s whereabouts remain unknown in 2024.
In 2018, ASIC set a new precedent by applying to the Federal Court to freeze Bigatton’s assets, including his cryptocurrency holdings. This marked the first instance of the Australian regulator obtaining freezing orders over digital assets.
According to an ASIC statement on May 17, Bigatton pleaded guilty to his involvement in promoting BitConnect. He admitted to providing advice without authorisation or the correct license. ASIC alleged Bigatton had advised on six occasions at different locations across Australia, stating that he “undertook promotional activities for BitConnect and the Lending Platform.”
