The 24-year-old founder of 2 crypto hedge funds overseeing $100 million admits to fraud
Stefan He Qin used the assets raised in his two hedge funds to pay for his own personal expenses, including a penthouse apartment.
The founder of a cryptocurrency hedge fund that claimed to use a trading algorithm to capitalize on price differences in several crypto assets pleaded guilty to securities fraud on Thursday, the Department of Justice said.
Stefan He Qin, a 24-year-old Australian national, admitted in court that he had embezzled nearly all the assets raised in his Virgil Sigma Fund, which along with his VQR Multistrategy Fund had more than $100 million in assets, the DOJ said.
Qin used the assets to pay for personal expenses including a penthouse apartment.
Prosecutors said Qin stole money from investors in Virgil Sigma, then tried to pay them back 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 the Southern District of New York, said in a statement.
For years Qin made misrepresentations and false promises to lure new investors into his funds. Marketing materials for Virgil Sigma claimed that the strategy had been profitable every month since August 2016 except for March 2017, the DOJ said.
Qin faces a sentence of as long as 20 years in prison.
In a statement, Qin's lawyers said he "has accepted full responsibility for his actions and is committed to doing what he can to make amends."