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An Australian Man Admits to Promoting BitConnect’s Dubious Crypto Lending Scheme
In a remarkable turn of events, an Australian man has pleaded guilty to his role in promoting the infamous cryptocurrency lending platform, BitConnect. This entity, which has been labeled as a Ponzi scheme, shut down in 2018 after allegedly defrauding victims of over $2.4 billion.
The Australian Securities and Exchange Commission (ASIC) revealed that John Louis Anthony Bigatton, BitConnect’s national promoter, provided financial product advice without the necessary licensing or authorization. Bigatton is said to have offered this advice on six occasions at various locations across Australia, including four seminars and two social media posts.
BitConnect’s lending platform was marketed as an investment opportunity, urging investors to purchase the platform’s native cryptocurrency, BitConnect coin (BCC). Investors could loan their BCC for a fixed period in exchange for high interest rates, but they had no control over their loans or the ability to withdraw their money until the lending period ended. This structure, according to the United States Internal Revenue Service, was designed to enable BitConnect to operate as a Ponzi scheme, paying early investors with funds from later investors.
A sentencing hearing for Bigatton is scheduled for July 5. This development comes as a group of BitConnect fraud victims recently received some respite, with a court ordering a $17 million restitution for the multibillion-dollar scam. However, the whereabouts of BitConnect’s founder, Satish Kumbhani, remain unknown.
This case serves as a cautionary tale, highlighting the need for investors to exercise extreme caution when presented with seemingly lucrative cryptocurrency investment opportunities. The collapse of BitConnect has had far-reaching consequences, underscoring the importance of thorough due diligence and regulatory oversight in the rapidly evolving digital asset landscape.