Two cryptocurrency hedge funds are charged in US Federal Court for securities fraud.
The founder of the cryptocurrency hedge funds had been charged in US Federal Court for securities fraud. He had pleaded guilty and now faces up to 20 years in prison. His two funds in total had over $100 million in investments.
Last Thursday, the US Department of Justice (DOJ) announced that Stefan He Qin, a 24-year-old Australian national and founder of two crypto hedge funds, had been charged with securities fraud and pleaded guilty in Manhattan federal court.
Qin “owned and controlled two cryptocurrency investment funds” named Virgil Sigma and VQR Multistrategy Fund from 2017 to 2020, the Justice Department described. Both funds were based in New York. The DOJ stated that the two funds had “over $100 million in investments.”
A special agent from Homeland Security Investigations (HSI), Peter Fitzhugh, commented that “Qin mastered the art of trickery by representing these firms as profitable investment strategies so more victims fell to his tactics and were defrauded of nearly $100 million.”
US Attorney Audrey Strauss stated that Qin “drained almost all of the assets from the $90 million cryptocurrency fund he owned [the Virgil Sigma fund], stealing investors’ money, spending it on indulgences and speculative personal investments, and lying to investors about the performance of the fund and what he had done with their money.”
Aside from that, 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.” But recently, the fund had at least around $24 million under management from investors.
Qin pleaded guilty to one count of securities fraud, which carried a maximum term of 20 years in prison. His sentencing had been scheduled for May 20.
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