Crypto Hedge Funds Defraud $100 Million From Investors, Founder Faces 20 Years in Prison
The founder of two cryptocurrency hedge funds has been charged in a US federal court with stock market fraud. He pleaded guilty and could face up to 20 years in prison. His two funds combined invested more than $100 million.
- The U.S. Department of Justice (DOJ) announced Thursday that Stephan He Qin, a 24-year-old Australian and founder of two cryptocurrency hedge funds, has been charged with securities fraud and convicted in federal court in Manhattan.
- Qin “owned and controlled two cryptocurrency mutual funds” called Virgil Sigma and VQR Multistrategy Fund between 2017 and 2020, the Justice Department said. Both funds were based in New York. Both funds had “more than $100 million in investments,” the DOJ said.
- Homeland Security Investigations (HSI) Special Agent Peter Fitzhugh said that “Qin has mastered the art of deception by presenting these companies as profitable investment strategies, so more victims have fallen for it and been scammed out of nearly $100 million.”
- According to Audrey Strauss, U.S. Attorney, Kinh “siphoned off virtually all the assets of a $90 million crypto fund [the Virgil Sigma Fund] that he owned, stole money from investors, spent it on excesses and speculative personal investments, and lied to investors about the fund’s performance and what it was doing with their money.”
- In addition, Strauss admitted in detail that Qin had admitted in federal court that he had “tried to steal money” from the multi-strategy fund VQR “to satisfy the ransom demands of investors who had been swindled out of the former fund.” Until recently, this fund had at least $24 million under management from investors.
- Qin pleaded guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison. Sentencing is scheduled for May 20.
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Bitcoin fraud, crypto fraud, crypto funds fraud, speculative crypto funds fraud, speculative crypto funds fraud, investing in crypto funds, prison, jail
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