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Top Australian BitConnect promoter banned by ASIC for 7 years

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The Australian Securities and Investments Commission (ASIC) has banned John Louis Anthony Bigatton, the former ‘Australian National Representative’ of the multi-billion-dollar crypto Ponzi scheme BitConnect, from providing financial services for seven years.

ASIC asserts that the New South Wales resident provided unlicensed financial product advice and engaged in misleading and deceptive conduct while working for BitConnect from August 2017 through January 2018.

While an investigation is still ongoing, the regulator has found that:

“Mr. 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 has the right to appeal the decision with ASIC’s Administrative Appeals Tribunal.

BitConnect collected roughly $2.6 billion from investors before shutting down its lending platform in January 2018 and pulling what was then described as the biggest exit scam in cryptocurrency’s history.

Australian authorities began investigating Bigatton after the platform’s collapse, with the Federal Court of Australia freezing his assets in December 2018 before placing travel restrictions on him the following month. Biggaton is believed to have earned at least $100,000 through promoting the scam.

Biggaton’s wife, Madeline Bigatton, disappeared in March 2018, with an inquest into her disappearance and suspected death expected to commence this year.

BitConnect was believed to be crypto’s largest Ponzi until late last year when the OneCoin scam succeeded in defrauding investors out of approximately $4 billion. 



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.