John Bigatton, a prominent promoter of the defunct cryptocurrency exchange Bitconnect, has been convicted by the Sydney District Court for providing unlicensed financial advice.
Between August 2017 and January 2018, Bigatton promoted Bitconnect through seminars and social media without the required financial services license, as reported by the Australian Securities and Investments Commission (ASIC).
Due to this conviction, he is now disqualified from managing corporations for five years.
Bitconnect, founded in 2016, offered a digital token called BitConnect Coin, which could be exchanged for Bitcoin.
Bigatton made bold claims during seminars, suggesting that BitConnect was superior to traditional term deposits and predicting that BitConnect Coin would reach a value of at least $1,000.
ASIC Deputy Chair Sarah Court highlighted the gravity of Bigatton’s actions, stating, “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 due to his misleading promotion of Bitconnect.
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BitConnect has had a tumultuous regulatory history. Its founder, Satish Kumbhani, was sued by the United States Securities and Exchange Commission (SEC) in 2021 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 fraud victims, Kumbhani’s whereabouts remain unknown as of 2024.
In a significant move in 2018, ASIC applied to the Federal Court to freeze Bigatton’s assets, including his cryptocurrency holdings, marking the first instance of the Australian regulator obtaining freezing orders over digital assets.
On May 17, Bigatton pleaded guilty to his role in promoting BitConnect, admitting to providing financial advice without proper authorization or the necessary license.
ASIC stated that Bigatton had advised on six occasions across different locations in Australia, noting that he “undertook promotional activities for BitConnect and the Lending Platform.”
Bigatton’s conviction underscores the importance of regulatory compliance in financial services, serving as a reminder of the consequences of providing unlicensed advice.
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