US Court Sentences Cryptocurrency Hedge Fund Founder to 7.5 Years in Prison – Regulation

The founder of two cryptocurrency hedge funds in New York, Stefan Qin, was sentenced to 7.5 years in prison and three years of supervised release. He is also ordered to forfeit approximately $55 million. The Department of Justice (DOJ) said he participated in a scheme to steal assets from his hedge funds and defraud investors.

Crypto Hedge Fund Founder Gets 7.5 Years in Prison

Stefan Qin, the founder of two cryptocurrency hedge funds in New York, has been sentenced to 7.5 years in prison, the US Department of Justice (DOJ) announced last week.

Qin, a 24-year-old Australian citizen, founded the Virgil Sigma Fund and the VQR Multistrategy Fund, which are said to have over $100 million in investments. He pleaded guilty to an indictment of securities fraud on February 4, according to the U.S. Securities and Exchange Commission (SEC). Lawsuit filed December last year against him.

According to the DOJ, Qin was sentenced to 90 months in prison on Wednesday.

The Justice Department said Qin owned and controlled the two cryptocurrency investment funds between 2017 and 2020. “As of recently, Virgil Sigma reported having over $90 million under management from dozens of investors, including many in the United States,” the ministry said. “As of recently, VQR had at least around $24 million under management from investors.”

The DOJ detailed:

Since 2017, Qin participated in a scheme to steal assets from Virgil Sigma and defraud its investors. Instead of investing the fund's assets in a cryptocurrency arbitrage trading strategy as announced, Qin embezzled investor capital from Virgil Sigma and used the funds for purposes other than the alleged arbitrage trading strategy.

Qin also attempted to steal assets from VQR, as Bitcoin.com News previously reported. The DOJ stated that Qin's two cryptocurrency funds "have ceased operations and are awaiting the liquidation and distribution of assets by a court-appointed receiver in SEC v. Qin, 20 Civ. 10849," adding:

Qin, 24, was also sentenced to three years of supervised release and ordered to forfeit $54,793,532.

Do you think Qin should go to prison for 7.5 years? Let us know in the comments section below.

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