An Australian man has entered a guilty plea for his involvement in promoting cryptocurrency lending services for the now-defunct crypto exchange BitConnect. BitConnect, which is widely believed to have operated as a Ponzi scheme, was shut down in 2018 following accusations of defrauding victims of over $2.4 billion.
The Australian Securities and Exchange Commission (ASIC) stated on May 17 that the man, John Louis Anthony Bigatton, provided financial product advice without the necessary license or authorization. Bigatton, who served as BitConnect’s national promoter, allegedly offered financial product advice at various locations across Australia, including seminars and social media posts.
BitConnect’s lending platform was marketed as an investment opportunity, enticing investors to purchase BitConnect coin (BCC) through its website. Investors could lend BCC for a fixed period and earn high interest rates. However, once invested, they were unable to control their loans or withdraw their money until the lending period ended. This structure allowed the platform to function as a Ponzi scheme, using funds from new investors to pay early investors, according to the United States Internal Revenue Service.
A sentencing hearing for Bigatton has been scheduled for July 5.
BitConnect was launched in February 2016 and operated a platform and digital currency until its closure in January 2018. The founders of BitConnect 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.
Recently, a group of victims of the BitConnect investment scheme received some relief when a court ordered a share of the $17 million restitution. However, the whereabouts of founder Satish Kumbhani remain unknown.