ASIC cites crypto promoter in unlicensed advice prosecution

The Australian Securities and Investments Commission (ASIC) has signalled its willingness to crack down on unlicensed financial advice, citing the conviction of a crypto promoter.

The regulator said John Bigatton, the Australian promoter of BitConnect, has been convicted by the Sydney District Court of providing unlicenced financial advice contrary to s911B(1) of the Corporations Act 2001. He was released on a recognisance to be of good behaviour for three years.

BitConnect was a financial services business and online crypto platform which required investors to acquire BitConnect Coin (a crypto token) in order to participate in its investment opportunities.

It said Bigatton provided unlicensed and unauthorised financial advice when he promoted BitConnect in Australia in seminars and on social media between August 2017 and January 2018.

Commenting on the conviction, ASIC Deputy Chair Sarah Court said, “Providing unlicensed financial advice denies Australian investors access to key protections and undermines trust and confidence in Australia’s financial services industry”.

“ASIC is committed to taking action against the unlawful promotion of high-risk digital assets to protect Australian investors,” she said. “This matter sends a clear message to Australians – that ASIC has and will act when unlicensed operators try to take advantage of Australian investors.”

ASIC alleged that In two of the seminars, Bigatton told attendees that BitConnect Coins would increase in value to at least USD$1,000. At another, he stated words to the effect that, ‘BitConnect is better than any term deposit out there.’

“This case is a reminder that many crypto assets are financial products under the current law and that services relating to them (including seminars and promotions) require an Australian financial services licence,” the ASIC statement said.