John Bigatton, the Australian promoter of BitConnect, was convicted by the Sydney District Court for providing unlicensed financial advice in violation of s911B(1) of the Corporations Act 2001.
In a statement issued on Monday, the Australian Securities and Investments Commission (ASIC) said he was released on a recognisance to be of good behaviour for three years.
BitConnect was a financial services business and online crypto platform which required investors to acquire BitConnect Coin (a crypto token) in order to participate in its investment opportunities.
ASIC said Bigatton provided unlicensed and unauthorised financial advice when he promoted BitConnect in Australia in seminars and on social media between August 2017 and January 2018.
“Providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry. ASIC is committed to taking action against the unlawful promotion of high-risk digital assets to protect Australian investors,” said ASIC deputy chair Sarah Court.
“This matter sends a clear message to Australians – that ASIC has and will act when unlicensed operators try to take advantage of Australian investors.”
According to ASIC, Bigatton told attendees in two of the seminars, the BitConnect Coins would increase in value to at least US$1,000. At another, he stated words to the effect that, “BitConnect is better than any term deposit out there”.
Judge Newlinds SC said “[t]he offending involved a breach of trust in that the recipients of the financial product advice were entitled to have an expectation that they were receiving advice from a sufficiently licensed and regulated individual”.
The court also told people who get involved in the promotion of financial products as part of a business for profit to be scrupulous in finding out for themselves what the law is and then to abide by that law.
“They need to understand that breach of these types of laws is a criminal offence and upon conviction they can expect to be met with stern penalties,” the court said.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions following a referral from ASIC.
