Former BitConnect Promoter Convicted for Unlicensed Financial Advice

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As a seasoned crypto investor with over a decade of experience under my belt, I’ve seen my fair share of scams and shady schemes. However, the recent conviction of John Bigatton, the infamous BitConnect promoter in Australia, serves as a stark reminder of the potential risks involved in this unregulated industry.

John Bigatton, the representative of BitConnect in Australia, has been officially declared guilty for dispensing unlicensed financial guidance. This verdict, which was reached on July 15, 2024, serves as a reminder of the potential hazards associated with investing in unregulated cryptocurrency ventures.

Bigatton’s sentence entails a three-year term of good behavior and a five-year ban on corporation management, following a thorough investigation by the Australian Securities and Investment Commission (ASIC).

Bigatton’s Hype Fuels Investor Losses

During the time frame from August 2017 to January 2018, Bigatton actively marketed BitConnect using seminars and social media. He touted potential substantial profits from investing in BitConnect Coin (BCC), which is a crucial cryptocurrency for the platform. However, it was revealed that Bigatton did not have the necessary permissions to offer financial guidance.

As an analyst, I would describe BitConnect’s investment strategy as follows: BitConnect enticed investors into their “volatility lending” program by promising attractive fixed-term returns on their BitConnect Coin (BCC) investments. Investors were encouraged to part with their BCC for defined durations, believing they would receive guaranteed high interest payments. However, once the investment was made, control over the BCC was surrendered, and access to withdraw funds was limited until the lending period elapsed. The Australian Securities and Investments Commission (ASIC) identified this business model as bearing striking similarities to a Ponzi scheme.

At a seminar, Bigatton boldly asserted that the value of BCC would skyrocket from $253 to a minimum of $1,000 within a year, positioning it as a superior alternative to conventional investments. However, these statements, which were later challenged in court, lacked any grounding in factual evidence.

The Sydney District Court refused to acknowledge Bigatton’s efforts to dissociate himself from the monetary consequences of his statements. Despite his disclaimers asserting that his guidance was not financial in character, the court ruled that the substance and form of his promotions amounted to unauthorized financial counsel.

ASIC Cracks Down on Financial Abuse

“Without a license, giving financial advice in Australia prevents investors from crucial safeguards and erodes trust and faith in the financial services sector. ASIC intends to take steps against the illegal marketing of risky digital assets to shield Australian investors,” expressed ASIC Deputy Chair Sarah Court.

In an unprecedented action taken by ASIC in 2018, they obtained a Federal Court order to seize Bigatton’s assets, including his cryptocurrencies. This initiative went beyond the usual courtroom proceedings and is currently being managed by the Australian Federal Police under the Proceeds of Crime Act in the Supreme Court of New South Wales.

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2024-07-15 15:12