Cryptocurrency News

Australian Regulators freeze assets of BitConnect Promoter

Australian promoter, John Bigatton, has had his assets frozen and hit with a travel ban outside Australia. Bigatton is accused of floating a crypto-Pyramid scheme that saw investors lose $US2.6 billion ($3.7 billion).

The directive was issued by the Federal Court in conjunction with international authorities after an investigation into his business affairs. The investigation was requested by Australia’s equivalent of the U.S’s equivalent of the Securities and Exchanges (SEC) – Australian Securities and Investments Commission (ASIC).

Bitconnect’s Collapse

Mr. Bigatton has acted for several firms as a financial investments advisor and a wealth management trustee. Most of the companies he is affiliated with are located in Sydney and Melbourne. His involvement in these firms has had him linked to the collapse of Bitconnect which saw US investors make huge losses on their investments.

Bitconnect’s collapse called attention to the massive risks that threaten the cryptocurrency industry. Due to its largely unregulated nature, security on investments tends to be low hence susceptible to theft. This has seen a series of class action suits instituted against Bitconnect.

The now defunct firm has been accused of pump and dump schemes in which investors were promised returns of up to 40 per cent by promoters and that people could “turn a $US1000 investment into a $US50 million return within three years”, according to a class action filed in Florida.

Mrs. Bigatton’s disappearance

In addition to the charges levelled against Mr. Bigatton, ASIC records indicate that a company registered under his wife was also involved in underhand deals. The court also froze assets linked to JB Investment Management. The firm is registered solely to Mrs. Bigatton as the sole shareholder and director. She has since been on the run. Mrs. Bigatton is alleged to have fled and sent the funds linked to the investigations in an offshore account.

Mrs. Bigatton went missing in March sparking fears she had met with foul play or had taken her own life. She has since been considered a missing person and a homicide suit instituted. This has helped her escape from being named as a defendant in her Husband’s case and no suggestion has been made to the effect that Mr. Bigatton was involved in his wife’s disappearance.

The investigations against Bitconnect keep opening new cases against suspected scammers. CRYPTO IS COMING!

Initiative Q – The Next Bitconnect?

If you’re a social media user, you’ve probably come across Initiative Q by now.

The well-marketed pseudo-cryptocurrency has taken social media by storm and shared by millions people around the world with promises of a financial revolution and, better yet, free money. Hmm.

So what is it?

Centralized Digital Currency – Sort of

“Initiative Q is building a new payment network. To get people to adopt it, they’re giving away significant sums of their future currency to early users. They require only name, email and an invite from an existing user.”

Initiative Q claims to be creating a form of payment that some feel may rival Bitcoin, while others denounce it as a scam.

The concept is of electronic money held in a centralized ledger. It doesn’t use a blockchain, and it doesn’t have a limited supply, two things which immediately distinguish it from Bitcoin. Blockchain networks help ensure decentralization, meaning nobody is in charge of the project, and the limited supply means nobody can simply print off more Bitcoin.

Initiative Q already seems to be at quite the disadvantage, but the founders who claim to be “ex-Paypal guys” state that the decision to shun blockchain will help reduce costs (the Bitcoin network is incredibly expensive to run and consumes more electricity than the island of Ireland).

So far, there are a few red flags. With so many new cryptocurrency projects coming out that arguably rival Bitcoin’s application as a digital currency, it’s difficult to see why a project would choose to take like what seems to be a step back in cybersecurity by avoiding blockchain – unless the reason is to achieve total control over the network.

However, if Initiative Q is not a cryptocurrency it may be far easier to use and more accessible to the many people who find using crypto wallets and exchanges too complex and technical, which could explain the huge surge in people signing up (2 million and counting).

Hallmarks of a Pyramid Scheme

One issue is that for a project that the founders insist is not a scam, it certainly meets a lot of the warning signal criteria.

The first is that it offers free money for signing up – at the moment the website banner reads that the next spot is worth $22,942. So that’s how much the next person who signs up receives in Initiative Q funds! Or, rather, that’s how much the funds are estimated to be worth in the future if 1Q = 1USD.


This generous estimate is based on the following:

The network is “superior technologically” and will “eventually overtake credit cards.”

Therefore, the total future value of Qs could reach a few trillion dollars. Since there are currently 2 trillion Qs, the goal of one US dollar per Q is achievable.

So the site is already claiming that it will completely eclipse all credit cards in the future and that the founders are now, without even printing off any new Q tokens, sitting on funds worth 2 trillion dollars. That reeks of desperate, disingenuous marketing and is not a good start, but let’s continue all the same.

The second hallmark of a Ponzi scheme is that it relies on users recruiting more users to join them and incentivizes them financially to do this. The more people you recruit, the more Q you eventually earn, so that’s immediately another red flag.

Q is available by invite only and the site attempts to create a false sense of urgency by showing the ticker with the diminishing value of your potential funds as well as allowing a limited number of invites per person.

Finally, the concept is not explained in technical terms at all. The Initiative Q network is simply described as “superior technology,” and that’s it, which could pretty much mean anything.

Saving Grace

However, the video makes one thing clear at the very beginning – the network is not asking users for an investment, simply that they join. At least for the moment, there’s nothing to suggest that people are getting scammed out of money, just that a company with some pretty distasteful marketing practices is pushing for viral adoption through social media.

However, at some point the free Q will be exhausted and presumably, people will need to purchase Q in order to participate in the network. It’s possible that the company is gearing up for yet another exit scam, and given the shady tactics used so far, I wouldn’t be surprised. It’s also possible that the enormous cache of personal information gathered from the 2 million hopeful users will be put to some other nefarious use.

However, it could be that they’re simply trying to create a rival to Bitcoin by capitalizing on the increasing mainstream awareness of cryptocurrency. In fact, the site even lists one of the reasons to join simply as:

Why not?

Think of it as getting free bitcoin seven years ago.

Yeah. Think of it as getting Bitcoin that needs to have a market cap of $2 trillion for one unit to be worth $1, but also the founders can print off unlimited amounts with no transparency or community oversight. I think I’m going to pass on this one.

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