Australian Man Pleads Guilty to Promoting BitConnect Crypto Scam; Sentencing Set for July 5
Summary:
An Australian man, John Louis Anthony Bigatton, has admitted to promoting the notorious BitConnect, a collapsed cryptocurrency exchange accused of being a Ponzi scheme that allegedly defrauded victims of over $2.4 billion. The Australian Securities and Exchange Commission accused Bigatton of providing financial advice without a necessary license. BitConnect, launched in 2016 with its own digital currency, shut down in 2018 with the founders disappearing with investors' funds. A sentencing hearing is set for July 5.
An Australian resident has admitted to his role in marketing cryptocurrency lending services for the now-collapsed digital currency exchange Bitconnect. Known for its infamous reputation, the exchange is accused of being a Ponzi scheme, with allegations suggesting it swindled victims out of upwards of $2.4 billion before closing in 2018. On May 17, the Australian Securities and Exchange Commission (ASIC) issued a statement indicating, "Mr. Bigatton provided advice on financial products without possessing an Australian Financial Services license or the required authorization to discuss the lending platform."
As the primary promoter of BitConnect within Australia, John Louis Anthony Bigatton was accused by ASIC of providing advice on financial products in six distinct incidents occurring across Australia, during four seminars held by him, and within two posts on social media. Bigatton's promotional work for BitConnect and its Lending Platform was performed using not only social media but also investor-oriented seminars that he conducted around the nation as well as in-person meetings with potential investors.
BitConnect's lending platform was advertised as an excellent investment choice, encouraging potential investors to purchase BitConnect coins (BCC) through its online portal. The platform allowed investors to loan their BCC with the promise of substantial interest rates for a predetermined period. However, once invested, they were unable to manage their loans or even withdraw their funds until the lending tenure was over. This was a scheme planned to function like a Ponzi, intended to pay earlier BitConnect investors using the funds from subsequent late investors, as indicated by the IRS.
BitConnect's sentencing hearing is slated for July 5. The platform was initially introduced in February 2016 with its own digital currency; however, it abruptly terminated its services in January 2018 with the founders consequently disappearing with the investors’ funds. The location of the founder, Satish Kumbhani, remains a mystery.
Eventually, in January 2023, the United States District Court for the Southern District of California commanded a refund of $17 million for the deceitful scheme. Following this, some victims of the multi-billion dollar BitConnect fraud scheme tasted relief as the court decreed that they were to be included in the $17 million reimbursement.
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Published At
5/18/2024 8:25:09 AM
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