The United States Attorney’s Office for the Southern District of New York has charged an Australian national with securities fraud. Stefan He Qin was the founder of two cryptocurrency hedge funds named Virgil Sigma Fund and VQR Multistrategy Fund. Qin stole nearly $90 million through his flagship crypto hedge fund.

According to the official statement released by the United States Department of Justice, Qin defrauded investors through Virgil Sigma Fund for years, and in December 2020, he attempted to steal money from his VQR Multistrategy Fund to pay the Virgil Sigma Fund investors.

Qin pled guilty on 4 February 2021 before United States District Judge, Valerie Caproni. The 24-year-old Australian lied to investors between 2017 and 2020 about the performance of the cryptocurrency hedge funds. Qin spent most of the stolen funds on luxuries and speculative personal investments.

“Stefan He Qin drained almost all of the assets from the $90 million cryptocurrency fund he owned, stealing investors’ 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. Then, as he further admitted today, Qin attempted to steal money from another fund he controlled to meet the redemption demands of the defrauded investors in the former fund. The whole house of cards has been revealed, and Qin now awaits sentencing for his brazen thievery,” Audrey Strauss, US Attorney for the Southern District of New York, said in a statement.

Cryptocurrency Scams

The crypto market has seen significant growth in recent years due to a rise in adoption and demand from institutional investors. Additionally, scammers have accelerated their efforts in recent years to target cryptocurrency investors. In this case, Qin established the cryptocurrency hedge funds like a Ponzi scheme to defraud investors.

“Qin mastered the art of trickery by representing these firms as profitable investment strategies so more victims fell to his tactics and were defrauded of nearly $100 million. The HSI New York El Dorado Task Force, with our incredible law enforcement partnerships, is committed to aggressively pursue fraud in all forms, regardless of how elaborate and profitable these schemes appear,” HSI Special Agent in Charge, Peter C. Fitzhugh said in the official release.