The founder of BitConnect was convicted by an Australian court for providing unlicensed Financial Service

The Australian Securities and Investments Commission (ASIC), the Australian regulatory authority, announced in a press release on July 15th that John Bigatton, the founder of BitConnect and an Australian citizen, has been convicted by the Sydney District Court for providing unlicensed financial advice/services from 2017 to 2018.

During the promotion of BitConnect, Bigatton promoted the platform in Australia through seminars and social media channels, claiming that its performance would far exceed any fixed deposit, and that the value of BitConnect Coins would increase to at least 1000 US dollars.

At the same time, ASIC’s deputy chair Sarah Court emphasized, “Providing unlicensed financial advice/services can leave Australian investors without vital protections and undermine their trust and confidence in the Australian Financial Service industry.”

Review of the BitConnect case

It is reported that BitConnect was established in 2016, created a Token called BitConnect Coin, and allowed investors to exchange BTC and participate in its exchange investment opportunities. However, this promise was eventually exposed as a Ponzi Scheme.

In January 2023, a federal district court in San Diego, USA, made an important ruling on the compensation distribution of victims of the BitConnect Ponzi Scheme. According to the court’s ruling, more than 800 victims are entitled to receive a corresponding share of the 17 million US dollars recovered from the fraudulent scheme, which involved an amount as high as 2.4 billion US dollars.

In May 2023, John Bigatton admitted to his involvement and provision of unlicensed Financial Service in the face of legal arbitration. It is reported that this admission is a further confirmation of previously acknowledged behavior, and this time it is an acknowledgment of specific criminal responsibility.

The related case in this matter is that BitConnect founder Satish Kumbhani was sued by a US court in early 2022 on charges of orchestrating this international billion-dollar Cryptocurrency Ponzi Scheme. Richard Primoff, an attorney for the US Securities and Exchange Commission (SEC), mentioned in regulatory filings that Kumbhani may have fled to an unknown Address in a foreign country, and his whereabouts remain unknown.

This case highlights the risks faced by investors in the Cryptocurrency sector, as well as the crucial role played by regulatory agencies in protecting investors and maintaining market integrity. With the increasing maturity of the Cryptocurrency market, strengthening regulation to safeguard investor rights has become particularly critical.

Conclusion:

With the judgment of the BitConnect case, the conviction of John Bigatton by an Australian court, and the prosecution of Satish Kumbhani in the United States, we have witnessed the determination and action of the international community in combating financial fraud and protecting investor rights. These legal actions not only provide an opportunity for victims to seek compensation, but also serve as a warning to potential wrongdoers. The active involvement of regulatory agencies such as ASIC and the Securities and Exchange Commission highlights the need to strengthen cross-border financial regulatory cooperation and the joint efforts to maintain market integrity globally.

In addition, investors should learn from the BitConnect incident and enhance their awareness of risks and be cautious about investment opportunities that promise high returns. With the continuous development of the Cryptocurrency market, it is necessary to strengthen the regulation of financial advice and investment products to ensure transparency and accountability. This requires not only continuous efforts from regulatory agencies but also vigilance and education from investors themselves. We look forward to a more sound regulatory environment that creates a safe and fair investment ecosystem for all market participants.