Stefan He Qin, the founding father of cryptocurrency hedge price range has been sentenced to extra than seven years in jail after U.S. government located that he cheated traders out of $fifty four million,

A Sept. 15 assertion from the U.S. Department of Justice (DoJ) introduced that U.S. District Judge Valerie Caproni exceeded Qin a ninety month sentence for defrauding his traders out of $fifty four million.

The 24-year-vintage Australian owned and operated cryptocurrency funding price range among 2017 and 2020 — Virgil Sigma and VQR, the latter of which changed into based in February 2020.

Despite Virgil Sigma claiming to make investments customers’ property in cryptocurrency arbitrage strategies, the DoJ located that Qin had embezzled investor capital from the fund to pay for private fees such as food, rent, and personal investments when you consider that 2017.

To keep away from arousing suspicions amongst his traders, Qin created fake account statements and bogus tax files claiming the organization were worthwhile for each unmarried month from August 2016 besides for March 2017.

After often mendacity to his customers concerning the “value, location, and standing in their funding capital” — with Sigma claiming to $ninety million in property in spite of Qin having “dissipated almost all the investor capital” — Qin sought to thieve property from VQR to pay redemption requests from Sigma’s traders.

In December 2020, Qin ordered VQR’s head dealer to wind down all the fund’s positions and switch the price range to the Australian. Despite caution that the flow could incur losses for VQR’s traders, the pinnacle dealer unwound VQR’s positions and forwarded the price range to Qin.

On Feb. 4, 2021, Qin pleaded responsible to at least one be counted number of securities fraud. In the DoJ’s contemporary announcement, U.S. Attorney Audrey Strauss said:

Qin has additionally been ordered to forfeit over $fifty four million and sentenced to 3 years of supervised release.