- The founder of two cryptocurrency hedge funds, Stefan He Qin has been charged in U.S. federal court for securities fraud
- He has pleaded guilty and is facing up to 20 years in prison
- The two crypto hedge funds founded by Qin cumulatively had over $100 million in investments
The founder of two crypto hedge funds, Stefan He Qin has been charged to court for defrauding investors of up to $100 million. The U.S. Department of Justice (DOJ) announced that Qin, a 24-year-old Australian national has been charged with securities fraud and has pleaded guilty in Manhattan federal court.
The US Department of Justice announced that Qin;
Oowned and controlled two cryptocurrency investment funds'' called Virgil Sigma and VQR Multistrategy Fund between 2017 through 2020, the Justice Department described. Both funds were based in New York. According to the DOJ, the two funds had “over $100 million in investments.
According to Special Agent Peter Fitzhugh, an officer with HSI (Homeland Security Investigations), Qin operated as he mastered the art of trickery. Qin represented and sold the funds as a profitable investment with trusted strategies.
As a result, more investors, who later became victims, fell to his schemes. Agent Fitzhugh noted that during the time he operated, he defrauded investors of nearly $100 million.
U.S. Attorney Audrey Strauss who is presiding over the case said Qin after collecting funds from investors drained almost all of the assets from the $90 million cryptocurrency fund he owned [the Virgil Sigma fund].
On the Flipside
According to Attorney Strauss, the investor’s money Qin stole, he spent on personal indulgences and speculative personal investments. Whilst spending the money, Qin lied to his investors about what he had done with their money, telling them that the funds were performing very well.
Until he was reprimanded, the funds managed by Qin held approximately $24 million under their management. In addition, Strauss detailed that Qin admitted in federal court that he “attempted to steal money” from the VQR Multistrategy Fund “to meet redemption demands of the defrauded investors in the former fund.”
Upon apprehension, Stefan He Qin pleaded guilty to one count of securities fraud, which according to the constitution carries a maximum term of 20 years in prison. His sentencing has been set to hold on the 20th of May 2021.