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Home Cryptocurrency Cryptocurrency News Cryptocurrency Fraudster Gets Prison Sentence From US Court for Duping Investors of Over $90
Million

Cryptocurrency Fraudster Gets Prison Sentence From US

Court for Duping Investors of Over $90 Million
Stefan Qin was sentenced to seven and a half years in prison.
By Radhika Parashar | Updated: 16 September 2021 15:15 IST

Crypto-scammer lived in a penthouse in New York City's Manhattan, US

HIGHLIGHTS

The scammer, Stephan Qin is

an Australian national

He dropped out of college to

run his hedge fund
companies in the US

He confessed in the court

that he is ashamed of
stealing people's money.

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
1 2 3 4 5 6 7 8 9 10
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
360percent, 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.

Also See Cybercrime Spreads in Australia as COVID-19 Pushes More People Online

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.
 1 2 3 4 5 6 7 8 9 10
In addition, the 24-year-old was also found to have been using a substantial portion of investor capital
to invest in crypto-assets like initial coin offerings — that had nothing
360 to do with the fund's stated
arbitrage strategy.
+ +

As per the US Department of Justice, Qin regularly lied to his investors about the value, location, and
status of their investment capital using false account statements and bogus tax documents that he
prepared and circulated among his investors.

Also See Cryptocurrency Mining, Trading to Face Crackdown in China's Hebei

Calling him “potentially dangerous person”, US District Judge Valerie Caproni said Qin was
“deliberately and consciously” choosing to scam his investors in this “white collar crime that is just as
devastating to victims as other types of crimes”, the Bloomberg reported added.

Towards the end of 2020, Qin's investors had begun to get suspicious of his intensions and had started
asking for their investment back. After that, the US Securities and Exchange Commission
reportedly froze his fund's crypto assets, leading to the surrender and arrest of Qin earlier this year.

Several investors who lost their money to this scam had reached out to the court claiming that they
have lost their life savings to Qin's fraud.

The 24-year-old has expressed shame at his deeds whilerevealing that he got into this crypto-space
with the intension of making quick and easy money during his days of college.

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and
WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on
Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and
Google News. For the latest videos on gadgets and tech, subscribe to ourYouTube
channel.

Further reading: Crypto, crypto currency, online scam, online fraud

Radhika Parashar
Email Radhika

2 3 4 5 6 7 8 9 10
Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the
last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom
nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to
her at RadhikaP@ndtv.com. More
360

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