Australian Court Charges Former Promoter of Crypto Ponzi Scheme BitConnect

CryptoNews.com

2024-07-15 01:58:51

Sujha Sundararajan

Last updated:

July 15, 2024, 05:58 EDT | 1 min read

The Sydney District Court has convicted the man behind the promotion of the now-defunct crypto exchange platform BitConnect. According to the nation’s corporate regulator, he was accused of providing unlicensed financial advice.

The Australian Securities and Investments Commission (ASIC), on Monday, released a statement regarding the conviction of John Bigatton. He was released and has been placed on a three-year “good behavior” bond.

Bigatton, in May, pled guilty to one count of providing unlicensed financial advice, linked to the crypto Ponzi scheme BitConnect.

The BitConnect utive promoted the company in Australia in seminars and on social media between August 2017 and January 2018.

This came into ASIC’s limelight and the agency took action against “the unlawful promotion of high-risk digital assets” to protect Australian investors, says Sarah Court, ASIC deputy chair.

“This matter sends a clear message to Australians – that ASIC has and will act when unlicensed operators try to take advantage of Australian investors.”

BitConnect, launched in February 2016 to much fanfare, presented itself as a crypto lending platform, promising hefty payouts. Later, the company collapsed in early 2018, after the value of its native coin declined by more than 90%. Later, the Texas State Securities Board issued a cease and desist against the company and labelling it a Ponzi scheme.

Last year, The US Department of Justice (DoJ) charged Satish Kumbhani, founder of BitConnect, for allegedly misleading investors globally and defrauding them of $2.4 billion in the process.

BitConnect Claimed to Generate Significant Returns for Investors

Further, the ASIC statement revealed that Bigatton was involved in two of the seminars. He reportedly told attendees that the native BitConnect Coins would increase in value to at least $1,000.

In another instance, he promoted saying, “BitConnect is better than any term deposit out there,” the statement added.

“The Offending involved a breach of trust in that the recipients of the financial product advice were entitled to have an expectation that they were receiving advice from a sufficiently licensed and regulated individual,” Judge Robert Newlinds noted.

The ASIC welcomed the conviction, referring the case to the Commonwealth Director of Public Prosecutions.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.