The Sydney District Court has convicted John Bigatton, a key figure in the promotion of the now-defunct cryptocurrency exchange BitConnect, for providing unlicensed financial advice. The Australian Securities and Investments Commission (ASIC) announced the conviction on Monday, highlighting its commitment to protecting investors from fraudulent schemes.

Details of the Conviction

Bigatton pled guilty in May to a single count of providing unlicensed financial advice related to the notorious crypto Ponzi scheme. He was sentenced to a three-year "good behavior" bond and released following the court's decision.

Between August 2017 and January 2018, Bigatton actively promoted BitConnect through seminars and social media, contributing to the platform's deceptive practices that ultimately led to its collapse in early 2018. ASIC's deputy chair, Sarah Court, emphasized the agency's vigilance against the unlawful promotion of high-risk digital assets, asserting, "This matter sends a clear message to Australians—that ASIC has and will act when unlicensed operators try to take advantage of Australian investors."

The Rise and Fall of BitConnect

Launched in February 2016, BitConnect initially garnered attention as a crypto lending platform, enticing investors with promises of substantial returns. However, the platform collapsed dramatically in early 2018, with its native coin losing more than 90% of its value. Following this collapse, the Texas State Securities Board issued a cease-and-desist order against BitConnect, labeling it a Ponzi scheme.

The fallout from BitConnect's failure prompted global scrutiny, culminating in charges against founder Satish Kumbhani by the US Department of Justice. He faces allegations of misleading investors and defrauding them of approximately $2.4 billion.

Misleading Promises to Investors

During the court proceedings, it was revealed that Bigatton participated in two specific seminars where he made exaggerated claims about BitConnect's potential. He assured attendees that the value of BitConnect Coins would soar to at least $1,000, and even stated, “BitConnect is better than any term deposit out there.” Such statements misled many investors, who expected licensed and regulated advice.

Judge Robert Newlinds highlighted the breach of trust involved, stating, "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."

ASIC's Continued Efforts

ASIC has welcomed the conviction and has referred the case to the Commonwealth Director of Public Prosecutions for further action. The regulatory body remains steadfast in its efforts to combat unlicensed operations within the cryptocurrency space, reinforcing the importance of investor protection in an evolving financial landscape.