Crypto promoter pleads guilty to unlicenced advice charge
![Gavel and scales of justice](https://financialnewswire.com.au/wp-content/uploads/Shutterstock_20123522062.jpg)
A promoter for the short-lived online cryptocurrency investment platform BitConnect has pleaded guilty in a NSW court to providing unlicensed financial product advice.
John Bigatton pleaded guilty to one criminal charge relating to his role as a national promoter for BitConnect, admitting he provided advice without a financial services licence on six occasions on behalf of the since discredited crypto firm.
Bigatton, as the Australian national representative for BitConnect (in which he served between August 2017 and January 2018), undertook promotional activities for the firm and its ‘Lending Platform’ across social media, at seminars across Australia, and through face-to-face investor meetings.
Bigatton was also nabbed on a related charge of operating an unregistered managed investment scheme; this second charge has since been withdrawn by the prosecutor after Bigatton’s guilty plea for the unlicensed advice charge.
BitConnect was a global cryptocurrency and online investment platform, widely considered to be operating a high-yield investment program or ‘Ponzi Scheme’. The firm, primarily based in the US, collapsed in 2018 just two years after its founding.
The BitConnect platform included a financial product known as the ‘Lending Platform’, promoted by the firm “as an investment opportunity”, ASIC said.
According to the regulator, in order to participate in the Lending Platform, investors were required to acquire BitConnect coin (BCC), a cryptocurrency token offered by BitConnect through its website.
The Lending Platform permitted lenders to invest or ‘loan’ BCC for fixed terms in exchange for promised high interest rates.
ASIC stated that “[investors] did not control their loans once invested, nor could they withdraw their capital investment until the expiry of the lending period”.
Bigatton was charged with providing financial product advice without holding an Australian Financial Services (AFSL) licence or authorisation to provide financial services about the Lending Platform and BCC on six instances at various locations around Australia through seminars (four) and social media posts (two).
In 2020, ASIC banned Bigatton from providing financial services for seven years in connection with his promotion of BitConnect.
At the time, Bigatton was found by ASIC to be: not a fit and proper person to provide financial services; not adequately trained, nor competent, to provide a financial service or financial services; and likely to contravene a financial services law.
ASIC confirmed that a sentencing hearing for Bigatton will take place on 5 July 2024 following his guilty plea.
Of course, can’t expect APRA or ASIC to actually really do anything against Industry / Union / Bikkie Super Funds.…
It's quite easy to charge way less than this and remain profitable and compliant. If clients have simple requirements then…
That average fee looks fine. I only asked because I have seen examples (not in the main) of advisers charging…
I struggle to understand this concept at all as these clients have choice and they don't deserve to be discarded…
I'd start by looking at your target profit margin, what your profit is now and what you need to charge…