John Bigatton, the Australian promoter of the now-defunct crypto exchange platform BitConnect, has been convicted by the Sydney District Court for providing unlicensed financial advice.
Bigatton was sentenced to a three-year recognizance of good behavior and disqualified from managing corporations for five years on Friday, according to court records and a statement from the country’s corporate regulator on Sunday.
Between August 2017 and January 2018, Bigatton promoted BitConnect through seminars and social media, providing financial advice without proper authorization.
Crypto Ponzi scheme BitConnect, which required investors to acquire BitConnect Coin (BCC) to participate in its investment opportunities, was marketed by Bigatton with promises of high returns.
Investors could invest or loan BCC for set periods in return for promised high interest rates.
Once invested, they had no control over their loans and could not withdraw their capital until the lending period ended, a statement from the Australian Securities and Investment Commission reads.
At one seminar, Bigatton claimed BCC would increase its value to at least $1,000 from $253 over one year and described the investment as superior to traditional term deposits.
The court highlighted Bigatton's disclaimers, which stated that his advice was not financial. Instead, the court determined that the substance of his actions constituted financial advice.
"Providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry," ASIC Deputy Chair Sarah Court said in the statement on Sunday.
In 2018, ASIC successfully applied to the Federal Court to freeze Bigatton’s assets, including his crypto holdings, marking a first for the regulator involving digital assets.
These proceedings, now overseen by the Australian Federal Police under the Proceeds of Crime Act, remain ongoing in the Supreme Court of New South Wales.
Bigatton had been previously banned by ASIC in 2020 from providing financial services for seven years. He pleaded guilty to one count of providing unlicensed financial advice in May.