News
Australian BitConnect frontman convicted but released
After two months of pleading guilty, BitConnect’s national promoter in Australia, John Bigatton, was found guilty by the court of providing financial advice without a license and released following a three-year sentence of good behavior.
The Australian court’s decision on Friday came after Bigatton pleaded guilty in May for his role in promoting the cryptocurrency scam to retail investors in the country. He promoted the cryptocurrency fraud scheme on social media, held seminars across the country, and met face-to-face with victims, convincing them to invest in the scheme.
License is a must
The Australian Securities and Investments Commission (ASIC), which charged Bigatton, reiterated that many cryptocurrencies are financial products and that seminars and promotions related to them are also would require a license.
“Providing unlicensed financial advice denies Australian investors access to key protections and undermines confidence in the Australian financial services industry,” ASIC Vice President Sarah Court said. “ASIC is committed to cracking down on the illicit promotion of high-risk digital assets to protect Australian investors.”
“This matter sends a clear message to Australians that ASIC has acted and will act when unlicensed operators seek to take advantage of Australian investors.”
A $2.4 Billion Scam
Although the case was legally framed as unauthorized financial activities, Bit Connection was actually a huge scam. The scheme lured victims with absurd fixed interest rates.
The investment structure offered by BitConnect
BitConnect heavily promoted its scheme globally in 2016 and 2017. The scheme incentivized invitations and referrals to grow its network of investors, or rather victims. The crypto scheme suddenly evaporated in 2018, with its websites and social media accounts disappearing, leading to investigations by agencies in several countries.
The scheme is estimated to have defrauded its investors of approximately AUD$2.4 billion worldwide.
Bigatton, the Australian promoter of the scheme, has promoted BitConnect locally in the country. According to ASIC, it has promoted the scheme, its lending platform and tokens. It has conducted four seminars nationwide and promoted the scheme with two social media posts.
He claimed that the value of BitConnect Coins would increase to at least $1,000 and that the system was “better than any term deposit.”
“[The] “The tort involved a breach of trust as the recipients of financial product advice were entitled to expect to receive advice from a sufficiently authorised and regulated individual,” the Australian judge said.
After two months of pleading guilty, BitConnect’s national promoter in Australia, John Bigatton, was found guilty by the court of providing financial advice without a license and released following a three-year sentence of good behavior.
The Australian court’s decision on Friday came after Bigatton pleaded guilty in May for his role in promoting the cryptocurrency scam to retail investors in the country. He promoted the cryptocurrency fraud scheme on social media, held seminars across the country, and met face-to-face with victims, convincing them to invest in the scheme.
License is a must
The Australian Securities and Investments Commission (ASIC), which charged Bigatton, reiterated that many cryptocurrencies are financial products and that seminars and promotions related to them are also would require a license.
“Providing unlicensed financial advice denies Australian investors access to key protections and undermines confidence in the Australian financial services industry,” ASIC Vice President Sarah Court said. “ASIC is committed to cracking down on the illicit promotion of high-risk digital assets to protect Australian investors.”
“This matter sends a clear message to Australians that ASIC has acted and will act when unlicensed operators seek to take advantage of Australian investors.”
A $2.4 Billion Scam
Although the case was legally framed as unauthorized financial activities, Bit Connection was actually a huge scam. The scheme lured victims with absurd fixed interest rates.
The investment structure offered by BitConnect
BitConnect heavily promoted its scheme globally in 2016 and 2017. The scheme incentivized invitations and referrals to grow its network of investors, or rather victims. The crypto scheme suddenly evaporated in 2018, with its websites and social media accounts disappearing, leading to investigations by agencies in several countries.
The scheme is estimated to have defrauded its investors of approximately AUD$2.4 billion worldwide.
Bigatton, the Australian promoter of the scheme, has promoted BitConnect locally in the country. According to ASIC, it has promoted the scheme, its lending platform and tokens. It has conducted four seminars nationwide and promoted the scheme with two social media posts.
He claimed that the value of BitConnect Coins would increase to at least $1,000 and that the system was “better than any term deposit.”
“[The] “The tort involved a breach of trust as the recipients of financial product advice were entitled to expect to receive advice from a sufficiently authorised and regulated individual,” the Australian judge said.