Stefan He Qin, an Australian Citizen, has pleaded guilty to charges of squandering over $90 million invested in his New York-based cryptocurrency funds. His case was filed before a Manhattan federal court on February 4 and he faces up to 20 years in jail.
According to the prosecutors, Qin operated a crypto fund called Virgil Sigma between 2017 and 2020, it was through this fund that he drained investor’s money by spending it on personal expenses and also investing in “speculative personal investments.” He was also accused of lying to investors about the performance of the funds and he failed to disclose what he has been doing with their money.
U.S. Attorney Audrey Strauss said the accused, in trying to meet up with the demands of Virgil Sigma’s redemption, he also tried to steal from another fund that was under his control. He calls this fund VQR Multistrategy Fund.
Peter Fitzhugh, a special agent of Homeland Security, noted that Qin operated the two crypto funds under his control as slush funds for his extravagant lifestyle. He added that the accused was able to achieve this by “making misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency firms.”
Qin, who was interviewed by the Wall Streets in 2018, said that Virgil Sigma earned profits through arbitrage opportunities in the crypto market. According to him, the fund uses a trading algorithm that looks to leverage on the price differences on a number of crypto assets, including Bitcoin, across different exchanges.
