Australian court convicts BitConnect promoter of unlicensed financial advice

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As a researcher who has closely followed the cryptocurrency scene over the past few years, I’ve seen my fair share of scams and fraudulent schemes. The recent conviction of John Bigatton, the Australian promoter of the notorious BitConnect Ponzi scheme, is a stark reminder of why regulation and oversight are crucial in this industry.

In 2023, I came across the news that an Australian court found John Bigatton, a prominent figure in BitConnect, guilty of offering unauthorized financial advice between the years 2017 and 2018.

Aussie John Louis Anthony Bigatton, who served as the national promoter for BitConnect, has been found guilty by the Sydney District Court for offering unauthorized financial guidance in accordance with the Australian Securities & Investments Commission (ASIC)’s announcement on Monday.

In the press release dated July 15, the regulatory body announced that Bigatton was granted bail with the condition of maintaining good conduct for a period of three years. This sanction was imposed following Bigatton’s promotion of BitConnect in Australia through seminars and social media during late 2017 and early 2018.

Unlicensed financial advice deprives Australian investors of essential safeguards, thereby eroding trust and faith in the integrity of Australia’s financial services sector.

ASIC deputy chair Sarah Court

Established in 2016, BitConnect introduced a token named BitConnect Coin, which could be swapped for Bitcoin (BTC) to engage in the platform’s investment offerings. During two of his seminars, Bigatton reportedly asserted that BitConnect surpassed traditional term deposits and that the value of BitConnect Coins would escalate to a minimum of USD$1,000.

In mid-May, Bigatton admitted to and was charged with one criminal offense in connection to illegally offering financial services without a license on behalf of another individual. Back in January 2023, the US federal court in San Diego decided that approximately 800 victims who had been taken advantage of by the Bitconnect Ponzi scheme would each receive a portion of the $17 million in restitution that was recovered from the scam’s $2.4 billion ill-gotten gains.

Satish Kumbhani, the mastermind behind BitConnect, faced indictment by a U.S. court jury in early 2022 over allegations of running an international crypto Ponzi scheme worth billions. According to a regulatory filing from Richard Primoff, attorney for the U.S. Securities and Exchange Commission, Kumbhani is believed to have left India and taken up residence at an undisclosed location abroad. His current whereabouts remain elusive.

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2024-07-15 11:08