BitConnect founder convicted by Australian court for providing unlicensed financial services

The Australian regulator, the Australian Securities and Investments Commission (ASIC), announced in a press release on July 15 that the founder of BitConnect, John Bigatton, an Australian, was found guilty of providing unlicensed financial advice between 2017 and 2018/ for services and was found guilty in the Sydney District Court.

Bigatton is promoting BitConnect across Australia through seminars and social media channels, claiming the platform will far outperform any time deposit and that the value of BitConnect Coins will rise to at least $1,000.

Meanwhile, ASIC's deputy chair Sarah Court stressed that "the provision of unlicensed financial advice/services deprives Australian investors of critical protections and undermines their trust and confidence in Australia's financial services industry."

BitConnect case review

It is reported that BitConnect, founded in 2016, created a token called BitConnect Coin and allowed investors to exchange Bitcoin and participate in investment opportunities on its exchange. However, this promise was eventually revealed to be a Ponzi scheme.

In January 2023, the U.S. Federal District Court in San Diego issued an important ruling allocating compensation to victims of the BitConnect Ponzi scheme. More than 800 victims are entitled to their share of the $17 million recovered in the $2.4 billion fraud, the court ruled.

In May 2023, John Bigatton faced legal proceedings and admitted criminal charges related to his participation in and provision of unlicensed financial services. It is reported that this admission is a further confirmation of previously recognized behavior, and this time it is an admission of specific criminal liability.

In a related case, BitConnect founder Satish Kumbhani was indicted by a U.S. court in early 2022 for allegedly orchestrating an international multi-billion dollar cryptocurrency Ponzi scheme. U.S. Securities and Exchange Commission (SEC) lawyer Richard Primoff mentioned in regulatory filings that Kumbhani may have fled from India to an unknown address abroad and his whereabouts are still unknown.

The case highlights the risks faced by investors in the cryptocurrency space and the critical role regulators play in protecting investors and maintaining market integrity. As the cryptocurrency market matures, it is critical to strengthen regulation to protect the rights and interests of investors.

Conclusion:

With the verdict of the BitConnect case, the Australian court’s conviction of John Bigatton, and the prosecution of Satish Kumbhani in the United States, we have witnessed the determination and actions of the international community in combating financial fraud and protecting investor rights. These legal actions not only provide victims with an opportunity to pursue compensation, but also serve as a warning to potential wrongdoers. The active involvement of regulators such as ASIC and the US Securities and Exchange Commission highlights the need to strengthen cross-border financial regulatory cooperation and joint efforts to maintain the integrity of financial markets on a global scale.

In addition, investors should learn lessons from the BitConnect incident, increase their awareness of risks, and be cautious about investment opportunities that promise high returns. As the cryptocurrency market continues to develop, increased regulation of financial advice and investment products must be implemented to ensure transparency and accountability. This requires not only the continued efforts of regulatory agencies, but also the vigilance and education of investors themselves. We look forward to a more robust regulatory environment to create a safe and fair investment ecosystem for all market participants.

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