A 24-year-old Australian cryptocurrency hedge fund founder accused of stealing nearly all of the $90 million in assets held by one his funds to spend on “indulgences and speculative personal investments” has pleaded guilty to one count of securities fraud.
Stefan Qin, founder of New York-based cryptocurrency hedge funds the Virgil Sigma Fund and the VQR Multistrategy Fund, allegedly stole investor money from Virgil Sigma for years and then tried to steal investor money from the VQR Multistrategy to pay back Virgil Sigma investors, according to the US Attorney’s Office for the Southern District of New York.
“Virgil Sigma and VQR, two multimillion-dollar cryptocurrency investment funds, were revealed to be slush funds for Qin to live his extravagant lifestyle,” Special Agent Peter Fitzhugh, head of Homeland Security Investigations’ New York Field Office, said in a statement. “Qin orchestrated this reprehensible criminal scheme for many years, making misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency firms.”
According to court documents, the Virgil Sigma fund claimed to earn profits from arbitrage opportunities in the cryptocurrency market by using a trading algorithm to take advantage of price differences among multiple cryptocurrencies. Qin allegedly promoted the strategy to the investing public as being “market-neutral,” which meant it wasn’t exposed to any risk from cryptocurrency price fluctuation and was therefore a