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After two months of pleading guilty, BitConnect’s national promoter in Australia, John Bigatton, has been convicted by the court for providing unlicensed financial advice and released on a recognisance of good behaviour for three years.
The Australian court’s decision on Friday came after Bigatton pled guilty in May for his role in promoting the cryptocurrency scam to retail investors in the country. He promoted the fraudulent cryptocurrency scheme on social media, hosted seminars across the country, and had face-to-face meetings with victims, persuading them to invest in the scheme.
Licensing Is a Must
The Australian Securities and Investments Commission (ASIC), which indicted Bigatton, reiterated that many crypto assets are financial products, and even seminars and promotions around them would require a licence.
“Providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry,” said ASIC’s Deputy Chair, Sarah Court. “ASIC is committed to taking action against the unlawful promotion of high-risk digital assets to protect Australian investors.”
“This matter sends a clear message to Australians – that ASIC has and will act when unlicensed operators try to take advantage of Australian investors.”
A $2.4 Billion Scam
Although the case has been legally framed around unlicensed financial activities, BitConnect was actually a massive scam. The scheme lured victims with absurdly high fixed interest rates.
BitConnect promoted its scheme heavily globally in 2016 and 2017. The scheme incentivised invites and referrals to grow its network of investors or, rather, victims. The crypto scheme suddenly evaporated in 2018, with the disappearance of its websites and social media handles, leading to investigations by agencies in several countries.
It is estimated that the scheme duped its investors of about AU$2.4 billion globally.
Bigatton, the Australian scheme promoter, promoted BitConnect locally in the country. According to ASIC, he promoted the scheme, its lending platform, and tokens. He conducted four seminars nationwide and promoted the scheme with two social media posts.
He claimed that BitConnect Coins would increase in value to at least US$1,000 and the scheme was “better than any term deposit.”
“[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,” the Aussie Judge stated.
This article was written by Arnab Shome at www.financemagnates.com.
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