If you trade or invest in cryptocurrencies, then you\u2019re probably no stranger to stories of crypto crime, and the latest incident involves an Australian national named Stefan He Qin, who at the time of writing, is accused of stealing as much as $90 million in digital asset funds from various investors.<\/p>\n
Stefan He Qin is the founder of two crypto hedge funds: Virgin Sigma Fund LP and VQR Multi-Strategy Fund LP. According to a report issued by the U.S. Department of Justice (DOJ), Qin stored his clients\u2019 money away for years and spent it on extravagancies that allowed him to enjoy a luscious lifestyle while customers were left with empty pockets.<\/p>\n
The case against Qin was filed on Thursday and is now being overseen by US District Judge Valerie Caproni in the United States District Court for the Southern District of New York. Official court documents suggest that Qin may have been active since 2017, operating two New York-based funds while spending customers\u2019 money on himself.<\/p>\n
Initially, Qin got traders to become engaged in his funds by touting a new trading algorithm he had developed. This algorithm was designed to monitor price changes across various digital trading platforms and boost financial rewards for his funds\u2019 growing lists of clients. Sadly, none of their money ever went towards profitable investments but rather to Qin\u2019s own expenses which included a penthouse and separate crypto trades for himself including those involving initial coin offerings (ICOs).<\/p>\n
The 24-year-old also held regular meetings with clients and public relations calls to ensure they were consistently under the impression that everything was going well. However, prosecutors claim that much of investors\u2019 money vanished not long after it was deposited into the hedge funds. Still, the organizations became so reputable that more clients began taking up positions and investing.<\/p>\n
Qin is believed to have used the money of new customers to pay off requests of old customers, a direct staple of Ponzi scheme behavior. The criminal activity was eventually exposed in late 2020 when Qin requested a head trader with VQR to stop all transactions and transfer all the money held by that fund to Virgil.<\/p>\n
In a statement, US attorney Audrey Strauss commented:<\/p>\n
\nStefan He Qin drained almost all of the assets from the $90 million cryptocurrency fund he owned, stealing investors\u2019 money, spending it on indulgences and speculative personal investments, and lying to investors about the performance of the fund and what he had done with their money. The whole house of cards has been revealed, and Qin now awaits sentencing for his brazen thievery.<\/p>\n<\/blockquote>\n
Thus far, Qin has pled guilty to one count of securities fraud. He is scheduled to face sentencing in May and could wind up spending the next 20 years of his life behind bars.<\/p>\n