In the complaint, the Commission alleged that the defendants defrauded investors of more than $92.4 million. Stefan Qin allegedly told investors that he will use their money for cryptocurrency trading based on a proprietary algorithm. He falsely claimed that his firm’s cryptocurrency funds consistently generated positive returns.
The SEC further alleged that the defendants used investors’ money for personal purposes and other undisclosed high-risk investments. They are defrauding investor in the Sigma Fund since at least 2018 by lying to them about its assets, strategy, and financial conditions,
“Since at least July 2020, Qin and Virgil Capital have told investors who requested redemptions from the Sigma Fund that their interests would be transferred instead to another fund under the ultimate control of Qin but with separate management and operations, the VQR Multistrategy Fund LP,” according to the SEC.
However, the SEC noted that the defendants did not transfer any funds and the investors’ redemption requests remain outstanding. Furthermore, the 23-year-old CEO is allegedly “actively attempting to misappropriate assets from the VQR Fund and to raise new investments in the Sigma Fund.”
