Crypto hedge fund founder admits to nearly $90 million securities fraud
February 5, 2021, 6:30AM EST
1 min read
A 24-year-old founder of two cryptocurrency hedge funds has pleaded guilty to securities fraud worth about $90 million.
The U.S. Department of Justice announced the news on Thursday, saying that Stefan He Qin, founder of New York-based Virgil Sigma Fund and VQR Multistrategy Fund, duped investors by stealing their capital.
Virgil Sigma was advertised as an arbitrage opportunity fund and had over $90 million worth of assets under management. VQR, on the other hand, employed different trading strategies and had at least about $24 million worth of investor funds.
Qin drained almost all of Virgil Sigma's assets and spent it on indulgences, and speculative personal investments, said U.S. Attorney Audrey Strauss.
He then attempted to steal money from VQR to meet the redemption demands of the defrauded investors in Virgil Sigma, said Strauss, adding: "The whole house of cards has been revealed, and Qin now awaits sentencing for his brazen thievery." The fraud occurred between 2017 through 2020.
Qin now faces up to 20 years in prison when he is sentenced on May 20.
Last December, the U.S. Securities and Exchange Commission also filed a parallel civil case against Qin. The agency at the time obtained an asset freeze order against Virgil Sigma Fund.