Audrey Strauss, the US Attorney for the Southern District of New York, announced that Australian national Stefan He Qin, founder of two New York-based cryptocurrency hedge funds, was sentenced to prison for 90 months.
Qin is the founder of Virgil Sigma Fund LP and the VQR Multistrategy Fund LP (VQR). The two crypto hedge funds claim to have a combined $100 million in investments.
On February 4th, 2021, Qin pleaded guilty to one count of securities fraud, which led to this week’s sentencing.
In an official report from the Southern District of New York, US Attorney Strauss says that Qin’s schemes were used to embezzle funds and make under-the-table investments with clients, leaving his investors short $54,793,000.
“According to Stefan He Qin, founder of Virgil Sigma and VQR, a pair of cryptocurrency hedge funds in New York, Virgil had a stated market strategy of ‘market-neutral,’ safe investments. Qin’s investors soon discovered that his strategies weren’t much more than a disguised means for him to embezzle and make unauthorized investments with client funds.
When faced with redemption requests he couldn’t fulfill, Qin doubled down on his scheme by attempting to plunder funds from VQR to satisfy his victim investors’ demands. Qin’s brazen and wide-ranging scheme left his beleaguered investors in the lurch for over $54 million, and he has now been handed the appropriately lengthy sentence of over seven years in federal prison.”