The Australian Securities and Investments Commission (ASIC) announced on Monday, July 15, that John Bigatton, a promoter of BitConnect, has been convicted by the Sydney District Court for providing unlicensed financial advice.
Unlicensed Financial Advice and Disqualification
ASIC reported that John Bigatton, the Australian promoter of BitConnect, provided unsolicited financial advice to promote the cryptocurrency exchange between August 2017 and January 2018. His activities included promoting BitConnect through seminars and social media, which ultimately led to his disqualification from managing corporations for nearly five years.
BitConnect Background
BitConnect, established in 2016, created its own digital token called BitConnect Coin, which could be exchanged for popular cryptocurrencies like Bitcoin, allowing participation in the exchange’s investment opportunities. During his seminars, Bigatton claimed that BitConnect was superior to traditional term deposits and predicted that BitConnect Coin would increase in value to at least $1,000.
In 2020, ASIC banned Bigatton from providing financial services for nearly seven years. ASIC Deputy Chair Sarah Court emphasized that “providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry.”
US SEC Lawsuit and Asset Freezing
In 2021, the US Securities and Exchange Commission (SEC) sued the BitConnect founder for allegedly raising approximately $2 billion fraudulently from retail investors. ASIC highlighted that Bigatton’s case serves as a reminder that many crypto assets are considered financial products under current law, necessitating an Australian financial services license for related services.
In 2018, ASIC applied to the Federal Court to freeze Bigatton’s assets, including cryptocurrency, marking the first time an Australian regulator obtained freezing orders over digital assets. The total value of the frozen assets is reportedly in the millions.
Australia’s Crypto Regulatory Landscape
Australia’s regulatory environment for cryptocurrencies is evolving, with products like spot Bitcoin ETFs gaining traction. Following the US, Australian regulators are taking significant steps to introduce crypto investment products while maintaining strict vigilance to prevent fraudulent activities.
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