A US court has sentenced Stefan Qin, a 24-year-old Australian man, to seven and a half years in jail for master-minding a hedge fund scam and duping over a hundred people of around $90 million (Rs. 660 crores approximately). In 2017, Qin had set up a hedge fund called Virgil Sigma Fund LP based in the New York City — where investors could invest money to purchase the cryptocurrency of their choice. Qin informed the US court that he developed a special trading algorithm called “Tenjin” that could generate profits by facilitating the purchase of a cryptocurrency on one exchange and selling it at a higher price on another, taking advantage of the difference in the prices across exchanges.
In 2017, his hedge fund Virgil had yielded an annual return of 500 percent, after which the Wall Street Journal had written a profile on Qin in 2018.
As part of his scam, Bloomberg reported that Qin lured investors by projecting that the invested fund was not exposed to any risk from the fluctuating prices of cryptocurrencies under the pretense of providing a safe space for investors and later used the money for his personal gains.
Qin reportedly began using the investors’ capital to pay for his personal expenses and to make illiquid investments in other entities like real estate that had nothing to do with cryptocurrencies as promised to the investors.
In addition, the 24-year-old was also found to have been using a substantial portion of investor capital to invest in…