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- A 24-year-old founder of two cryptocurrency hedge funds pleaded guilty to securities fraud on Thursday.
- The two hedge funds had more than $ 100 million in assets, the Justice Department said.
- He diverted almost all of someone’s capital to pay for personal expenses, including a penthouse.
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The founder of a cryptocurrency hedge fund that claimed to use a trading algorithm to capitalize on price differences on various crypto assets pleaded guilty to securities fraud on Thursday, the Justice Department said.
Stefan He Qin, a 24-year-old Australian, admitted in court that he embezzled almost all of the assets raised in his Virgil Sigma Fund, which together with his VQR Multistrategy Fund had more than $ 100 million in assets, said the DOJ.
Qin used the assets to pay for personal expenses, including a penthouse.
Prosecutors said Qin stole money from Virgil Sigma investors and then tried to return it with assets raised from investors in his second multi-strategy fund.
“The whole house of cards has been revealed and Qin is now awaiting sentencing for his blatant theft,” Audrey Strauss, New York City’s acting district attorney, said in a statement.
For years, Qin has made false statements and false promises to attract new investors to his funds. Virgil Sigma marketing materials claim that the strategy has been profitable every month since August 2016, except March 2017, said the DOJ.
Qin faces up to 20 years in prison.
In a statement, Qin’s lawyers said he “has accepted full responsibility for his actions and is committed to doing what he can to repair things.”
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