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SEC Attacks Another Crypto Firm!

The SEC announced recently that a New York court had granted it the right to freeze Virgil Capital LLC’s assets and its managing partner, Stefan Qin, for embezzling money Qin said that was earmarked for a crypto trading bot.

The SEC obtained the rights to freeze the firm’s assets, which claimed to manage $112M, over allegations that Qin has victimized investors in Virgil Capital’s Sigma Fund since 2018 by misrepresenting its strategy, assets, and financial condition.

The SEC alleged that Qin misled investors by telling them that he would invest their money in a crypto trading algorithm that benefitted from price differences among the exchanges.

Truthfully, the SEC adds, Qin and his affiliates also used the money for personal purposes or other undisclosed high-risk investments, like the ICOs.

“Qin allegedly made false promises to lure investors and then continued his deception to conceal his misuse of investor funds,” SEC Cyber Unit Chief Littman said.

And when the investors wanted to withdraw their money, the SEC alleged that Qin convinced them to instead move funds from its Sigma Fund to its $25M VQR MultiStrategy Fund.

After that, Qin told the investors that the bank had delayed their transactions between the two funds.

“In reality, the wire transfers were rejected because there were not sufficient funds in the Sigma Fund’s account to complete the wire transfers,” the SEC alleges.

The SEC’s complaint, file in the Southern District of New York last Dec. 22, 2020, charges Qin, Virgil Technologies LLC, Montgomery Technologies LLC, Virgil Quantitative Research LLC, and VQR Partners LLC with violations of the antifraud provisions of the federal securities laws.

The action bans the firm’s operations, orders its operators to return money to the investors, and ultimately forces them to pay civil penalties.

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