An Australian citizen pleaded guilty to cheating investors by more than $ 90 million by wasting the money they invested in their New York-based cryptocurrency funds.
Stefan He Qin, 24, filed the charge against a single charge of securities fraud in a Manhattan federal court on Thursday, February 4.
According to the United States Attorney’s office for the Southern District of New York, the fraud occurred from 2017 to 2020, when Qin operated the fund called Virgil Sigma. In a statement, US Attorney Audrey Strauss said:
“Stefan He Qin drained almost all of the assets of the $ 90 million cryptocurrency fund he owned, stealing investors’ money, spending it on speculative personal investments and indulgences and lying to investors about the fund’s performance and what it had done with your money, “
She added that Qin then tried to steal money from another fund he controlled, called VQR Multistrategy Fund, to meet the demands for rescue from defrauded investors in Virgil Sigma.
Many of the defrauded investors were American citizens and Qin could face up to 20 years in prison in the May 20 sentence.
Homeland Security Investigations Special Agent Peter Fitzhugh said the two New York-based multi-million dollar cryptocurrency investment funds were revealed as funds for his extravagant lifestyle, adding:
“Qin orchestrated this reprehensible criminal scheme for many years, making misrepresentations and false promises that persuaded investors to dump millions of dollars into fraudulent cryptocurrency firms, while stealing their investors’ hard-earned money.”
Virgil Sigma intended to employ a strategy to profit from arbitrage opportunities in the cryptocurrency markets. He used a trading algorithm to take advantage of the price differences of a number of crypto assets, including Bitcoin, on up to 40 different exchanges around the world, including three located in the United States.
Qin was interviewed by the Wall Street Journal in October 2018, when he explained how his arbitration bots worked.
Its public marketing materials claim that Virgil Sigma has been profitable every month from August 2016 to the present, with the sole exception of March 2017.