Two months after pleading guilty, BitConnect’s national promoter in Australia, John Bigatton, was convicted by the court for providing unlicensed financial advice. He was subsequently released on a recognisance of good behaviour for three years.
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 fraudulent scheme on social media, hosted seminars across the country, and had face-to-face meetings with victims, persuading them to invest in the scheme.
Licensing Is a Must
The Australian Securities and Investments Commission (ASIC), which indicted Bigatton, reiterated that many crypto assets are financial products, and even seminars and promotions around them would require a licence.
“Providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry,” said ASIC’s Deputy Chair, Sarah Court. “ASIC is committed to taking action against the unlawful promotion of high-risk digital assets to protect Australian investors.”
“This matter sends a clear message to Australians: that ASIC has and will act when unlicensed operators try to take advantage of Australian investors.”
A $2.4 Billion Scam
Although the case has been legally framed around unlicensed financial activities, BitConnect was a massive scam. The scheme lured victims with absurdly high fixed interest rates.
BitConnect promoted its scheme heavily worldwide in 2016 and 2017. It incentivized invites and referrals to expand its network of investors—or rather, victims. The crypto scheme suddenly evaporated in 2018, and its websites and social media handles disappeared. This led to investigations by agencies in several countries.
The scam is estimated to have duped its investors out of approximately AU$2.4 billion globally.
According to ASIC, Bigatton promoted BitConnect locally in Australia, including its lending platform and tokens. He conducted four seminars nationwide and promoted it with two social media posts.
He claimed that BitConnect Coins would increase in value to at least US$1,000 and the scheme was “better than any term deposit.”
“[The] offending involved a breach of trust in that the recipients of the financial product advice were entitled to have an expectation that they were receiving advice from a sufficiently licensed and regulated individual,” the Aussie Judge stated.
This article was written by Arnab Shome at www.financemagnates.com.
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