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- A 24-year-old founder of two cryptocurrency hedge funds pleaded guilty on Thursday to security fraud.
- The Department of Justice said the two hedge funds had more than $ 100 million in assets.
- He embezzled almost all of his capital to pay for personal expenses, including a penthouse.
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The founder of a cryptocurrency hedge fund, which claims to use a trading algorithm to capitalize on price differences in various cryptocurrencies, pleaded guilty on Thursday to security fraud, the Justice Department said.
Stefan He Qin, a 24-year-old Australian citizen, admitted in court that he had embezzled almost all the assets raised in his Virgil Sigma fund, which together with his VQR Multistrategy Fund had more than $ 100 million in assets had, the DOJ said.
Qin used the assets to pay for personal expenses, including a penthouse.
Prosecutors say Qin stole money from investors in Virgil Sigma and then tried to repay it with the assets investors acquired in its second multi-strategy fund.
“The entire house of cards has been unveiled, and Qin is now awaiting sentencing for his uncivilized theft,” Audrey Strauss, the acting U.S. Attorney for New York’s Southern District, said in a statement.
Qin has for years made misrepresentations and false promises to attract new investors into its funds. Marketing materials for Virgil Sigma claim that the strategy has been profitable every month since August 2016, except in March 2017, the DOJ said.
Qin faces up to 20 years in prison.
In a statement, Qin’s lawyers said he “accepted full responsibility for his actions and was committed to doing what he could to rectify.”
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