BitConnect promoter pleads guilty

The promoter of BitConnect Australia has pleaded guilty for his role in spruiking a fraudulent cryptocurrency scheme.

John Bigatton promoted BitConnect, an online cryptocurrency platform that offered a financial product known as the Lending Platform on social media and seminars across the country.

Bigatton faced the Sydney District Court on May 16 and admitted to providing unlicensed financial services on behalf of another person contrary to section 911B (1) of the Corporations Act, which is the provision of financial services on behalf of a person who carries on a financial services business.

He promoted The Lending Platform as an investment opportunity and to participate, investors had to acquire BitConnect coin (BCC), a cryptocurrency token offered by BitConnect through its website.

The platform enabled lenders to invest or loan BCC for fixed terms in exchange for promised high interest rates.

Investors did not control their loans once invested, nor could they withdraw their capital investment until the expiry of the lending period, ASIC's investigation found.

On top of this, Bigatton provided financial product advice without holding an AFS Licence or authorisation to provide financial services about the Lending Platform and BCC. He will be sentenced on July 5, with the matter being prosecuted by the Commonwealth Director of Public Prosecutions.

The judge withdrew a related charge of operating an unregistered managed investment scheme after Bigatton pleaded guilty to the charge for which he is to be sentenced.

Upon investigating Bigatton, ASIC estimated that BitConnect had a market capitalisation of over US$2.5 billion at the end of 2017. The scheme collapsed in early 2018.