Sydney District Court Bans BitConnect Promoter for 5 Years

John Bigatton has been convicted for unlicensed financial advice, impacting the credibility of Australia’s financial sector.

• The Sydney District Court has convicted John Bigatton, a prominent promoter of the defunct cryptocurrency exchange platform Bitconnect, for providing unlicensed financial advice.
• According to the Australian Securities and Investments Commission (ASIC), Bigatton promoted Bitconnect through seminars and social media between August 2017 and January 2018.
• The ASIC clarified that Bigatton did so without the necessary financial services license, disqualifying him from managing corporations for the next five years per the conviction.

Misleading claims and implications

Bitconnect was founded in 2016 and offered a digital token called BitConnect Coin, which could be exchanged for Bitcoin (BTC). Bigatton claimed in seminars that BitConnect was superior to traditional term deposits and predicted that the BitConnect Coin would reach at least $1,000. ASIC Deputy Chair Sarah Court expressed that the unlicensed financial advice provided by Bigatton undermines trust in Australia’s financial services industry. In 2020, the ASIC banned Bigatton from providing financial services for seven years.

BitConnect regulatory history

BitConnect’s founder, Satish Kumbhani, was sued in 2021 by the United States Securities and Exchange Commission (SEC) 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 the fraud victims, Kumbhani’s whereabouts are still unknown in 2024. In 2018, the ASIC set a new precedent, applying to the Federal Court to freeze Bigatton’s assets, including his cryptocurrency holdings. This event marked the first instance of the Australian regulator obtaining freezing orders over digital assets.

Bigatton’s May guilty plea

According to an ASIC statement on May 17, Bigatton pleaded guilty to his involvement in promoting BitConnect, admitting to providing advice without authorization or the correct license. The ASIC alleged Bigatton had advised on six occasions at different locations across Australia, stating that he “undertook promotional activities for BitConnect and the Lending Platform.”