An Australian man has admitted his involvement in promoting cryptocurrency lending services for the now-defunct crypto exchange BitConnect, which was notorious for operating as a Ponzi scheme and closed down in 2018 after allegations of defrauding victims of over $2.4 billion.
The Australian Securities and Exchange Commission (ASIC) stated on May 17 that “Mr. Bigatton provided financial product advice without holding an Australian Financial Services license or authorization to provide financial services about the lending platform.” ASIC claimed that John Louis Anthony Bigatton, in his capacity as BitConnect’s national promoter, offered financial product advice at various locations across Australia, including four seminars and two social media posts.
BitConnect’s lending platform was marketed as an investment opportunity, urging investors to purchase BitConnect coin (BCC) through its website. Investors could lend BCC for a fixed period in exchange for high interest rates. However, once they invested, they were unable to control their loans or withdraw their funds until the lending period concluded. The United States Internal Revenue Service alleged that this structure allowed the platform to function as a Ponzi scheme, using money from new investors to pay off early BitConnect investors.
A sentencing hearing has been scheduled for July 5.
BitConnect was launched in February 2016 and operated a platform and digital currency before shutting down in January 2018. The founders disappeared with investors’ funds. In January 2023, the U.S. District Court for the Southern District of California ordered a restitution of $17 million for the fraudulent scheme.
Following a court order, a group of victims of the BitConnect investment scheme received a portion of the $17 million restitution, providing some relief from the multibillion-dollar fraud. The whereabouts of founder Satish Kumbhani are still unknown.