Virgil Capital Founder Admits $100 Million Crypto Fund Fraud
- Stefan He Qin claimed his algorithm produced arbitrage profits
- Australian national, 24, plundered one fund to cover another
The 24-year-old founder of Virgil Capital, which ran two cryptocurrency hedge funds, admitted to duping investors out of almost $100 million and using the money to support a lavish lifestyle.
Stefan He Qin pleaded guilty Thursday in federal court in New York and faces as much as 20 years in prison at his sentencing in May. Prosecutors said the Australian national stole investor money from Virgil Sigma Fund LP, a fund he controlled that purported to use a trading algorithm to take advantages of price differences in a variety of cryptocurrencies, and attempted to dip into his VQR Multistrategy Fund LP to pay back investors in the first fund.
“The whole house of cards has been revealed, and Qin now awaits sentencing for his brazen thievery,” Audrey Strauss, the acting U.S. Attorney for Manhattan, said in the statement.
Prosecutors said Qin touted his strategy as “market-neutral,” meaning the fund wasn’t exposed to any risk from cryptocurrency price fluctuations. But instead of putting the assets in the arbitrage strategy, Qin used the money to pay for food, services and rent for a penthouse apartment in New York, make personal investments in other entities and assets.