ASIC Charges BitConnect Promoter For Offering Unlicensed Advice
Highlights
- Bigatton promoted BitConnect through seminars and social media, leading to his disqualification.
- Bigatton had promised that the BitConnect token would increase in value to at least $1,000.
- ASIC obtained Federal Court orders to freeze Bigatton's assets, including cryptocurrency.
On Monday, July 15, the Australian Securities and Investments Commission (ASIC) announced that the Sydney District Court has convicted BitConnect promoter John Bigatton for providing unlicensed financial advice to promoters.
BitConnect Promoter Provided Unsolicited Advice
ASIC said that Bigatton, the Australian promoter of BitConnect gave unsolicited financial advice for promoting the crypto exchange in seminars and on social media in the period between August 2017 and January 2018. As a result, he was disqualified from managing corporations for nearly five years.
Founded in 2016, BitConnect created its own digital token dubbed BitConnect Coin allowing it to be exchanged with popular cryptocurrencies like Bitcoin, thereby participating in exchange’s investment opportunities.
ASIC noted that in two of his seminars, Bigatton said that BitConnect is better than any term deposit and that the BitConnect coins would increase in value to at least $1,000. Then in 2020, the regulator banned Bigatton from providing financial services for nearly seven years. ASIC Deputy Chair Sarah Court said:
“Providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry”.
Also Read: VanEck Bitcoin ETF Debuts on Australian Stock Exchange ASX
US SEC sued Bigatton
The Reuters report notes that back in 2021, the US securities regulator sued the BitConnect founder for his alleged role in fraudulently raising approximately $2 billion from retail investors.
In a related development, the Australian Securities and Investments Commission (ASIC) highlighted that Bigatton’s case serves as a reminder that many crypto assets are considered financial products under current law. Thus, it necessitates having an Australian financial services license for related services.
Moreover, back in 2018, the ASIC had applied to the Federal Court to freeze Bigatton’s assets, including cryptocurrency. This marked the first time an Australian regulator had obtained freezing orders over digital assets, with the total value of the frozen assets reportedly in the millions.
Australia’s crypto regulatory landscape is improving significantly while allowing products like spot Bitcoin ETFs to flourish in the country. Following the US, the Australian regulators are also taking bold measures to let crypto investment products hit the market. At the same time, regulators like ASIC are having strict vigilance in order to prevent any fraudulent activity.
Also Read: Australia Bitcoin ETF In Sync With Soaring Institutional Buying
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