The Securities and Exchange Commission (SEC) has accused the founder of hedge fund Virgil Capital which specializes in cryptocurrency arbitrage, of fraud.
- Stefan Qin, the 23-year-old founder of Virgil Capital has been accused by the SEC of “fabricated records,” for failing to redeem $3.5 million in investments and attempting to withdraw $1.7 million in investor funds to pay off Chinese loan sharks, the SEC said..
- On Tuesday, the SEC applied to the U.S. District Judge Lorna Schofield for an emergency order to suspend $25 million in digital assets owned by another fund managed by Qin.
- The SEC accuses Qin of fraud involving the Virgil Sigma Fund LP, of New York, and VQR Multistrategy Fund LP, of the Cayman Islands.
- The hedge fund manager is being accused of altering spreadsheet tracking investments at 39 cryptocurrency trading platforms in 2019.
- Earlier this year Qin falsely informed investors looking to redeem $3.5 million investments from their funds that the money would be moved to the VQR Multistrategy Fund – the funds were not been transferred, according to the SEC.
- Qin also asked VQR head trader Antonio Hallak to assist with withdrawing $1.7 million from the fund, claiming he had borrowed money from Chinese loan sharks to invest in the Sigma fund, according to Reuters.
- Qin, whom the SEC said is believed to be currently in South Korea, is prepared to cooperate with the SEC and have a “fulsome set of facts” and is “committed to ensuring that no investors are harmed.” said his lawyers, Reuters said.
- The SEC is seeking an order permanently restraining Qin from participating in the sale, issuance, purchase oroffer of any security except on his personal account, a disgorgement of profits and civil penalties.
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