Aussie admits to promoting BitConnect crypto services without a license

An Australian man has pleaded guilty to the existing crypto exchange BitConnect — the entity that operated as a Ponzi scheme and was shut down for defrauding victims of more than $2.4 billion.

“Mr. Bigaton provided financial product advice without an Australian Financial Services License or a license to provide financial services on the lending platform,” the Australian Securities and Exchange Commission (ASIC) said in a statement on May 17.

In his role as ASIC's National Promoter for BitConnect, John Lewis Anthony Bigaton has provided financial product advice at various venues across Australia, in four seminars and two social media posts.

“Mr Bigaton has carried out promotional activities for BitConnect and the lending platform on social media, at seminars he has organized in various locations in Australia and in face-to-face meetings with investors.”

The BitConnect lending platform was promoted as an investment opportunity, encouraging investors to purchase BitConnect Coin (BCC) through the website.

Investors can borrow BCC for a limited period of time in return for higher interest rates. Once they have invested, they cannot control their loan or withdraw their money until the loan term is over. According to the United States Internal Revenue Service, the platform was set up this way to operate as a Ponzi scheme, paying early Bitcoin investors money from later investors.

A sentencing hearing is set for July 5.

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BitConnect was launched in February 2016 and operated as a platform and digital currency before shutting down in January 2018. The founders eventually ran out of investors' money.

A few years later, in January 2023, the US District Court for the Southern District of California ordered him to pay $17 million in restitution for the fraudulent scheme.

A group of victims of a BitConnect investment scheme crypto scam have seen some respite from the multi-billion dollar fraud scheme after a court ordered them to pay $17 million in damages.

Founder Satish Kumbani's whereabouts are unknown.

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