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The 24-year-old founder of 2 crypto hedge funds overseeing $100 million admits to fraud – Business Insider

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  • A 24-year old founder of two cryptocurrency hedge funds pleaded guilty to securities fraud on Thursday.
  • The two hedge funds had more than $100 million in assets, according to a Department of Justice statement.
  • The founder embezzled almost all of the capital to pay for personal expenses, including a penthouse apartment.
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The founder of a cryptocurrency hedge fund that claimed to use a trading algorithm to capitalize on price differences in a number of crypto assets plead guilty to securities fraud on Thursday.

Stefan He Qin, a 24-year old Australian national, admitted in court that he embezzled nearly all of the assets raised in his two hedge funds, Virgil Sigma Fund LP and VQR Multistrategy Fund LP. The combined assets of the two funds were more than $100 million, according to a Department of Justice statement.

Qin used the assets raised in his two hedge funds to pay for his own personal expenses, including a penthouse apartment.

Prosecutors said that Qin stole investor money from his Virgil Sigma Fund and tried to pay back investors in his first fund with the assets raised from investors in his second multistrategy fund.

“The whole house of cards has been revealed, and Qin now awaits sentencing for his brazen thievery,” Audrey Strauss, the acting US Attorney for Manhattan, said in the statement.

The house of cards lasted for years as Qin made misrepresentations and false promises to lure new investors into his funds. 

Marketing materials for Virgil Sigma claimed that the strategy was profitable in every single month from August of 2016 to today, except for March of 2017. 

Qin ultimately faces a prison sentence of as long as 20 years. 

In a statement, Qin’s lawyers said, “Mr. Qin has accepted full responsibility for his actions and is committed to doing what he can to make amends.”

Read more: Market wizard Michael Kean has averaged a 29% annual compounded return since starting his company 10 years ago. He shares his unique stock-picking strategy and 4 pieces of advice for anyone who wants to become a trader.

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