Cryptocurrency hedge fund founder admits to massive fraud

first_imgA 24-year-old founder of two New York-based cryptocurrency hedge funds with more than $100 million in investments pleaded guilty Thursday to securities fraud.Stefan He Qin was charged with duping investors by claiming he used a trading algorithm to take advantage of price differences for a number of cryptocurrencies, federal prosecutors said in a statement. Qin stole investor money from his Virgil Sigma Fund, and attempted to dip into his VQR Multistrategy Fund to pay back investors in the first fund, prosecutors said. He admitted trying to steal from yet another fund he controlled to cover VQR fund redemption demands, according to the statement.“The whole house of cards has been revealed, and Qin now awaits sentencing for his brazen thievery,” Audrey Strauss, the acting U.S. Attorney for Manhattan, said in the statement.Qin’s fraud relied on misrepresentations about his investment strategy to lure millions of investor dollars into the fraudulent cryptocurrency firms, prosecutors said. Qin, an Australian national, embezzled almost all the capital from the Virgil Sigma fund to pay for, among other personal expenses, a penthouse apartment. He faces up to 20 years in prison.“Mr. Qin has accepted full responsibility for his actions and is committed to doing what he can to make amends,” his lawyers, Sean Hecker and Shawn Crowley, said in a statement.The Securities and Exchange Commission filed a parallel civil case against Qin in December.[More: Fintechs push Bitcoin trading onward and upward: Fidelity]last_img read more