The founder of two cryptocurrency hedge funds, Virgil Sigma Fund LP and VQR Multistrategy Fund LP, has pleaded guilty to one count of securities fraud, the U.S. Department of Justice (DoJ) said in a press release on 4 February.
On Thursday the 24-year-old Australian national, Stefan Qin, admitted in front of the Manhattan federal court to stealing around $90 million from the Sigma fund. Qin was able to lure investors to the fund by claiming to use a trading algorithm that takes advantage of cryptocurrency price differences, and then lie about the performance of the fund and the whereabouts of investors’ money. U.S. Attorney Audrey Strauss said in a statement:
“The whole house of cards has been revealed, and Qin now awaits sentencing for his brazen thievery.”
Qin then tried to cover his fraudulent scheme by dipping into the VQR Multistrategy Fund to pay back investors in Sigma, and later attempted to steal from yet another fund to cover VQR fund redemption demands.
The New York-based Sigma fund and Cayman Islands-based VQR fund have been run by Qin between 2017 and 2020. Part of the stolen funds, according to the announcement, were used to support Qin’s lavish lifestyle, which included an apartment in New York.
The Australian national was accused of fabricating records by the U.S. Securities and Exchange Commission (SEC) back in December, when investors in the fund failed to redeem $3.5 million. The SEC further said at the time that Qin attempted to withdraw around $1.7 million in order to pay off Chinese loan sharks.