The Australian Securities and Investment Commission (ASIC) working with the US Federal Bureau of Investigation and the Crown Prosecutors office have charged Mr John Bigatton, the Australian promoter of the notorious $2.6 billion BitConnect offering, with offences relating to breaches of securities law.
At the height of the initial coin mania in 2017/2018, BitConnect was accused of running an exit scam/Ponzi Scheme while claiming to offer participants outrageous returns of 1% a day.
The scheme involved participants buying a digital currency, BitConnect Coin, and locking up that coin when it was purchased with a return promised, supposedly driven by a "trading bot". Multilevel marketing and impossibly high payouts attracted the attention of regulators to the offering.
Authorities moved in, in 2018, the alleged Indian head of BitConnect was arrested in Dubai the Texas State Securities Board and regulators from North Carolina in the US issued a cease and desist letter to the company, calling it a Ponzi scheme, and BitConnect promptly closed. The Australian arm of BitConnect was the subject of freezing orders
In January 2019, Mr Bigatton's assets, together with those of a related company JB Investment Management, were frozen and his passport was seized by ASIC as part of an investigation, which involved suspicion around his wife's mysterious disappearance. In those court proceedings Mr Bigatton unsuccessfully argued that bitcoin wasn't money.
In September 2020, Mr Bigatton was banned from providing financial services for 7 years.
ASIC has today announced charges against Mr Bigatton as follows:
one count of operating an unregistered managed investment scheme, which carries a maximum penalty of 5 years imprisonment and/or a fine of $42,000;
one count of providing unlicensed financial services on behalf of another person, which carries a maximum penalty of 2 years of imprisonment and/or a fine of $42,000;
four counts of making a false or misleading statement affecting market participation, with a maximum penalty for each charge of 10 years of imprisonment and.or a fine of $945,000
In addition, ASIC has alleged that further misleading or false statements were made during BitConnect seminars Mr Bigatton conducted. The matter was listed today and has been adjourned for a mention on 2 February 2021 in Downing Centre Local Court, Sydney.