The Securities and Exchange Commission (SEC) is currently investigating the Australian fund manager who manages the crypto fund
The multinational hedge company Virgil Capital, which allows trading in cryptomeda, is managed by Stefan Qin. The SEC claims that the company has stolen a sum of $92 million from investors. The 23-year-old founder faces several charges, ranging from document manufacturing to cryptoma-related securities fraud.
Last week, the commission requested a court order to freeze some $25 million in digital assets held by another Australian-administered fund. The SEC also sought to halt the fund’s operations. Stefan Qin would have obtained investment funds from clients lying about their business performance as well as their regulatory status.
In addition to falsifying audit documents, he also used false financial statements to attract investors. The oversight committee also claims that Qin has committed to investing the funds in crypto-currency transactions using a proprietary algorithm. However, the money was not directed to investment in cryptomime Profit Secret, but was transferred to his accounts. He intended to use the funds to pay Chinese creditors.
An SEC press release said: “Since at least July 2020, Qin and Virgil Capital told investors who requested Sigma Fund redemptions that their interests would be transferred to another fund under Qin’s final control, but with separate management and operations, the VQR Multistrategy Fund LP. The claim claims that no fund was transferred and the redemption requests remain pending. The SEC complaint further alleges that Qin is actively trying to appropriate VQR Fund assets and raise new investments in Sigma Fund“.
Qin is said to have sold fraudulent crypto fund shares since 2018 through five associated business entities, namely Virgil Technologies, VQR Partners, Virgil Quantitative Research, Montgomery Technologies and Virgil Capital.
This is not the first SEC case involving fraud and misappropriation in the crypto space. The commission has dealt with several crypto fraud cases and even issued an investor alert in the past. Kristina Littman, head of the Cyber Unit of the SEC’s Enforcement Division, said: “This emergency action is an important step to protect investors’ assets and avoid further damage.