A Sydney man has pleaded guilty to spruiking a cryptocurrency Ponzi scheme for six months through a number of seminars and social media posts.

John Bigatton from Carss Park in New South Wales pleaded guilty in Sydney District Court last week to one charge of providing financial services without a licence in relation to his role promoting BitConnect in late 2017 and early 2018.

BitConnect was an open-source cryptocurrency in operation from 2016 to 2018, connected with a high-yield investment program known as Lending Platform.

To participate in this program, users were required to buy BitConnect’s cryptocurrency coin, BCC.

The investors could then invest or “loan” BCC for fixed terms in exchange for promised high interest rates.

The company claimed to use proprietary technology to generate these significant and guaranteed returns by trading the investors’ money on cryptocurrency exchange markets, with an average daily compounding interest of 1 per cent promised.

Once investors put in the money, they had no control over this loan and could not withdraw the cash until the expiry of the lending period.

But it was soon revealed that this program was a classic Ponzi scheme, with cash from new investors being used to pay out older ones.

Through this scam, BitConnect was able to fleece $3.6 billion ($US2.4 billion) from 4,000 investors across 95 countries.

BitConnect’s strategy to attract investors to its Ponzi scheme involved the use of high-profile individuals extolling the virtues and economic opportunities associated with it.

One of these people was Bigatton, who was the Australian National Representative for Bitconnect from August 2017 to January 2018.

Across this time, Bigatton spruiked BitConnect’s Lending Platform in two social media posts and at four seminars in Australia, and also in face-to-face meetings with investors, according to ASIC.

He has now pleaded guilty to providing financial product advice without holding an Australian Financial Services licence or authorisation to provide financial services about BitConnect.

A related charge of operating an unregistered managed investment scheme was dropped by the prosecutor after Bigatton pleaded guilty to the other charge.

The case was led by the Commonwealth Director of Public Prosecutions following an investigation and referral by ASIC.

Bigatton will be sentenced on 5 July.

‘Stock market on steroids’

Bigatton appeared at BitConnect’s annual ceremony in 2017 to promote the Ponzi scheme.

“We have an opportunity that our kids and our kids’ kids are going to be embracing, and that’s cryptocurrency and the digital world…this is like the stock market, on steroids, times ten,” Bigatton said at the event.

In late 2020, ASIC banned Bigatton from providing financial services for seven years over his role in the crypto Ponzi scheme.

BitConnect shut down in January 2018 following a 92 per cent decline in the value of its crypto coin.

This came after the Texas State Securities Board issued a cease and desist against the platform, labelling it a Ponzi scheme that had failed to provide transparency on user earnings and had provided misleading statements.

In 2022, the founder of BitConnect, Indian national Satish Kumbhani, was indicted in San Diego over the scheme.

The following year, a US court ordered that 800 victims of the BitConnect Ponzi scheme be awarded $25 million ($US17 million) in compensation.

Thousands of more victims will not receive any of their money back.

A US-based promoter of BitConnect, Glenn Arcaro, also pleaded guilty to wire fraud conspiracy charges in September 2021, and was ordered to pay back $36 million ($US24 million) to scammed investors.

Arcaro was also sentenced to 38 months in prison for his participation in the scheme.