Photographer: Akos Stiller / Bloomberg
Photographer: Akos Stiller / Bloomberg
A 24-year-old founder of two cryptocurrency hedge funds in New York, with investments of over 100 million dollars, pleaded guilty Thursday to securities fraud.
Stefan He Qin has been accused of misleading investors by claiming that he used a trading algorithm to take advantage of price differences for a number of cryptocurrencies, federal prosecutors said in an emailed statement.
Qin stole investors’ money from his Virgil Sigma LP Fund and tried to sink into the VQR Multistrategy Fund LP to reimburse investors from the first fund, prosecutors said. He admithe tried to steal from another fund which he controlled to cover the redemption claims of the VQR fund, according to the statement.
“The entire bookstore has been revealed, and Qin is now awaiting sentencing for his wire thief,” Audrey Strauss, the U.S. prosecutor in charge of Manhattan, said in a statement.
Qin’s fraud was based on misrepresentations about his investment strategy to attract millions of dollars to investors in fraudulent cryptocurrency companies, prosecutors said. Qin, an Australian citizen, embezzled almost all the capital from the Virgil Sigma fund to pay, among other personal expenses, a penthouse apartment. He faces up to 20 years in prison.
“Sir. Qin has taken full responsibility for his actions and is committed to doing all he can to compensate,” his lawyers, Sean Hecker and Shawn Crowley, said in a statement.
The US Securities and Exchange Commission has drawn a parallel civil lawsuit against Qin in December.
– With the assistance of Olga Kharif
(Updates with Qin lawyers’ comments)