A US district judge sentenced Stefan He Qin to more than seven years in prison for involvement in crypto fraud.
After Stefan He Qin was convicted of his crime in February, he has now been convicted by the US Attorney’s Office for the southern district of New York. According to the US Attorney’s Office, Qin is sentenced to seven and a half years in state prison and more than $54 million was confiscated. The verdict was passed by US District Judge Valerie E. Caproni.
The 24-year-old Chinese-Australian has been accused of falsely reporting the proceeds of his hedge fund to help finance a luxurious lifestyle. The fund once controlled more than $90 million in investor money. Eventually, Qin pleaded guilty to these charges.
Stefan He Qin Crypto Fraud
In 2016, when he was only 19 years old, Qin founded a pair of cryptocurrency mutual funds, Virgil Sigma and VQR. Both companies were located in New York City, New York, according to court records.
According to prosecutors, Virgil Sigma was formed to “pursue a strategy to capitalize on arbitrage opportunities in the cryptocurrency market”. The office also reported that from the start, Qin was involved in a plan to pillage fund assets and deceive investors who trusted Virgil Sigma. Qin did this by putting Virgil Sigma funds in personal accounts for “purposes other than so-called arbitrage trading strategy”. Most of these funds are used for personal expenses such as groceries and penthouses in New York.
Qin also deceived investors in his VQR fund, which “employs a variety of trading strategies and is willing to make or lose money based on fluctuations in the value of cryptocurrencies and is not market neutral. Qin is the sole owner of VQR, already in December 2020, the multiple redemption requests of the fund could not be fulfilled. Qin did this by investing capital from Virgil Sigma into personal accounts to be used for purposes other than the purported arbitrage trading strategy. The majority of these funds were used for personal expenses such as food and a New York Penthouse apartment.
Since then, all funds have ceased operations and the court has started liquidating and distributing the assets.