A U.S. District Judge has sentenced Stefan He Qin to more than seven years behind bars for his part in a crypto fraud operation.

After being convinced of his crimes back in February, Stefan He Qin has now been sentenced by the United States Attorney Office of the Southern District of New York. According to the U.S. Attorney’s Office, Qin was given a sentence of seven and a half years in state prison along with the confiscation of more than $54 million. The ruling was handed down by U.S. District Judge Valerie E. Caproni. 

The 24-year-old Chinese Australian national was accused of misreporting the proceeds for his hedge fund to fund a lavish lifestyle. The fund in question at one point controlled more than $90 million in investor funds. Qin ended up pleading guilty to the charges. 

Qin founded a pair of cryptocurrency investment funds in 2016 when he was just 19-years old, Virgil Sigma and VQR. According to court documents, both companies were located in New York, New York. 

Virgil Sigma was set up to “employ a strategy to earn profits from arbitrage opportunities in the cryptocurrency market,” according to the Attorney’s Office. The office also reports that since the very beginning, Qin has engaged in a scheme to skim assets from the fund and defraud investors who trusted Virgil Sigma. 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. 

Qin also defrauded investors of his VQR fund, which “employed a variety of trading strategies and was poised to make or lose money based on the fluctuations in the value of cryptocurrency and was not market neutral.” Qin was the sole owner of VQR and was unable to meet several redemption requests from the fund back in Dec. 2020. Qin apparently tried to funnel money from VQR to personal accounts so that he could first pay off similar redemption requests from Virgil Sigma investors. Redemptions he was unable to fulfill because the funds had already been stolen by Qin himself. He did this against the advice of senior traders who eventually ceded control of the fund to Qin. 

Each fund has since ceased operation and the liquidation and distribution of assets have begun by the court. 

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The post Hedge Fund Manager Sentenced to Seven Years for Crypto Fraud appeared first on BeInCrypto.

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