October 25, 2020

Volume X, Number 299

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ASIC Bans Former BitConnect Front-man

John Louis Anthony Bigatton will not be providing financial services in Australia and likely not anywhere else, anytime soon. On Thursday, September 3, 2020, the Australian Securities and Investments Commission (“ASIC”) officially banned Bigatton from providing financial services for the next seven years due to his promotion of BitConnect. The fraudulent cryptocurrency startup is now infamous for the exuberant endorsement of another promoter named Carlos Matos whose enthusiastic sales pitch turned into a widely shared meme meant to represent a hucksterism inherent to cryptocurrency.  It seems that Bitconnect and its boosters may forever serve as the popular image of crypto fraudsters.

Bigatton served as the Australian National Representative for the infamous online cryptocurrency known as BitConnect based in the United Kingdom. BitConnect and its investment scheme known as the BitConnect Lending Platform, purportedly allowed users to lend the value of their BitConnect Coins in return for daily compounded interest payments. Users were told by promoters like Bigatton that they could trade Bitcoin for BitConnect Coin on the BitConnect Lending Platform and lock in instantaneous value for the coin for a set period while earning an extremely high rate of daily interest.

Those thinking the value locking and daily compounded interest sound too good to be true would be correct: BitConnect met its swift demise in January 2018 when several U.S. state regulatory authorities issued cease and desist notices or warnings that the BitConnect platform was in fact a Ponzi scheme. BitConnect shut down on January 17, 2018, leading to a crash of 92% in BitConnect Coin prices and swindling investors out of up to $2.6 billion USD.

From August 2017 to January 2018, Bigatton served as the BitConnect front man in Australia, just one of many promoters of this scam. As a consequence of his unlicensed participation in the BitConnect scheme, ASIC found that Bigatton: “is not a fit and proper person to provide financial services; is not adequately trained, or is not competent, to provide a financial service or financial services; and is likely to contravene a financial services law.”

Bigatton is also under investigation by the Australian Federal Police for money laundering. The desire for easy profit led many people to gamble funds on Bitconnect that they could not afford to lose. For Mr Bigatton the results have been devastating, as he has been banned by the ASIC, faces a long jail sentences and his wife has gone missing under mysterious circumstances in apparent connection with this scandal. Once the facade of the BitConnnnect scam crumbled the investors and ultimately Bigatton himself are left with nothing pain but pain to show for their efforts.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 255
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About this Author

Richard Levin Polsinelli Fintech Attorney
Shareholder

Richard Levin is the Chair of Polsinelli’s Chambers rated FinTech and Regulation Practice.  He brings his experience as a senior legal and compliance officer on Wall Street and in London to bear in advising clients on corporate, securities and regulatory issues. A problem-solver by nature, his practice focuses on helping financial services and technology (FinTech) clients identify and address regulatory issues as they build their businesses.

The FinTech sector is...

303.583.8261
Stephen A. Rutenberg Shareholder Polsinelli New York Bankruptcy and Financial Restructuring Bankruptcy Litigation Capital Markets ,Commercial Lending ,Debt and Claims Trading, Financial Services, Insolvency, Financial Technology FinTech and Regulation
Shareholder

Stephen Rutenberg’s practice focuses on the intersection of special situations investing and FinTech including cryptocurrency and blockchain technology. 

A significant component of Stephen’s practice relates to his work in the distressed debt market, representing clients in the purchase and sale of loans and securities of distressed and bankrupt companies. Recent representations include advising on the purchase, sale and financing of bankruptcy trade claims in several major chapter 11 cases, including Lehman Brothers, and the MF Global and Icelandic bank liquidations. He works with all types of clients, specifically, asset managers, hedge funds, private equity firms, and global financial institutions that seek him out for his legal understanding, business sense, responsiveness, and care for client needs. 

Together with the other lawyers in Polsinelli’s renowned FinTech and Regulation practice, Stephen represents, investors, issuers and underwriters looking for market leading perspectives,  on cutting edge utilization of blockchain technology including investing in cryptocurrency and initial coin offerings (ICO’s). 

Stephen has experience with general financings, lending, and other corporate transactions. He has also counseled clients in the negotiation of total return swaps, credit default swaps, and other structures for the purchase and/or financing of loan and claim portfolios as well as formation and structuring work for startup companies and funds.
 

Admitted to practice in New York and as a solicitor in England and Wales, Stephen has significant experience advising on cross-border distressed trading matters and is recognized for this in the 2016 edition of IFLR1000as a Rising Star. In February 2017, Stephen received the UJA-Federation of New York’s James H. Fogelson Emerging Leadership Award for his contributions to the New York legal and philanthropic communities. Stephen is recognized as a thought leader frequently writing and speaking on the FinTech and distressed loan trading.

212.413.2843
Carter D. Gage Associate Corporate and Transactional Investment Funds
Associate

As an associate in the Corporate and Transactional practice, clients rely on Carter Gage to deliver a wide range of legal services during the life cycle of the client’s business. His practice focuses on advising clients on mergers and acquisitions and general corporate and transactional matters, ranging from selecting the appropriate choice of entity to dispositions and exit strategy. 

Carter focuses on building quality relationships with clients in order to better understand their needs and better project what issues their businesses might encounter in the future. He believes that...

212-413-2874
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