Regulation
ASIC Convicts Crypto Personality for Unlicensed BitConnect Consulting
On Monday, July 15, the Australian Securities and Investments Commission (ASIC) revealed that John Bigatton, a prominent figure in the cryptocurrency world, was convicted of providing unlicensed financial advice in relation to BitConnect.
The Sydney District Court found Bigatton guilty of offering unsolicited financial advice via seminars and social media between August 2017 and January 2018. His actions included promoting BitConnect Coin, a digital token introduced by BitConnect in 2016, which claimed to offer lucrative investment opportunities.
The ASIC investigation highlighted that during the seminars, Bigatton promoted BitConnect as superior to traditional term deposits and predicted that the value of his token would skyrocket to $1,000.
This misconduct led to ASIC disqualifying Bigatton from running companies for nearly five years, highlighting the seriousness of financial advice provided without a licence in Australia.
Regulatory scrutiny has extended beyond Australia, with the The US SEC has already sued the founder of BitConnect over allegations that it fraudulently raised approximately $2 billion from retail investors in 2021.
ASIC Deputy Chairman Sarah Court has highlighted the importance of licensing in financial services, saying unlicensed advice deprives investors of essential protections and undermines confidence in the financial sector.
The case serves as a stark reminder that many crypto assets are regulated financial products under current Australian law, requiring compliance with stringent licensing requirements. In a precedent-setting move in 2018, ASIC sought and obtained freezing orders on Bigatton’s assets, including cryptocurrency, a first in Australian regulatory history.
This action, which reportedly froze millions of dollars in assets, reflects ASIC’s proactive stance in the evolving cryptocurrency regulation landscape in Australia. As Australia continues to refine its cryptocurrency regulatory framework, balancing innovation with investor protection, ASIC remains vigilant against fraudulent schemes.