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Australian Pleads Guilty in $2.4B BitConnect Scam

Bitconnect

An Australian has entered into a guilty plea to his role in marketing cryptocurrency lending services for the now-defunct cryptocurrency exchange BitConnect. Bitconnect was a notorious company that was closed down in 2018 after allegedly operating as a Ponzi scheme and defrauded customers of over $2.4 billion.

“Mr. Bigatton gave advice on financial products without having an Australian Financial Services license or authorization to offer financial services about the lending platform,” the Australian Securities and Exchange Commission (ASIC) said in a statement dated May 17.

ASIC claimed that in his capacity as national promoter for BitConnect, John Louis Anthony Bigatton provided financial product advice on six separate occasions in various parts of Australia, at four seminars, and in two social media posts.

“Mr Bigatton undertook promotional activities for BitConnect and the Lending Platform on social media, at seminars that he hosted at various locations around Australia, and through face-to-face meetings with investors.”

BitConnect currency (BCC) purchases were encouraged on the company’s website as an investment possibility through the promotion of its lending platform.

For a set period, investors might lend BCC at high interest rates. They were powerless over their loans after they were invested and could not take their money out till the lending term was up. The IRS claims this was done so the platform could function as a Ponzi scheme, compensating early BitConnect investors with funds from later investors.

July 5 is the scheduled sentencing hearing.

Launched in February 2016, BitConnect was a digital currency and platform until closing in January 2018, when its owners vanished with the money they had raised.

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January 2023, a few years later, saw an order for $17 million in reparations for the fraudulent plan from the United States District Court for the Southern District of California.

A court decided that a group of BitConnect investment scheme victims receive a portion of a $17 million payment, providing some relief from the multibillion dollar fraud scheme.

It is still unknown where creator Satish Kumbhani is.

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