The U.S. SEC charges Stefan Qin, an Australian citizen, for crypto-based securities fraud. In accordance with the press release issued today, Qin has sold fraudulent crypto fund shares since 2018 via five business entities. The case defendants are Stefan Qin, Virgil Quantitative Research LLC, Virgil Technologies LLC, Montgomery Technologies LLC, Virgil Capital LLC, and VQR Partners LLC.
The SEC elucidates that Qin’s businesses provided an algorithmic crypto trading fund that made phony promises and assurances. The SEC states Stefan Qin raised funds from investors by falsifying his business administration and regulatory status. In extension, he gave their clients counterfeit financial statements and fabricated audit documents.
Stefan Qin directed crypto funds to his personal accounts.
The complaint claims that the fraudsters alleged that they will only fund cryptocurrency trading based on a proprietary algorithm. However, the funds never went via digital asset investments. Alternatively, Qin ransacked millions of dollars from the fund to his personal accounts. He utilized the funds to pay off Chinese loan sharks. The U.S. SEC further accuses Qin of prevaricating records. Qin declined to redeem $3.5 million to investors, and attempting to withdraw $1.7 million of investor funds to repay loans.
The SEC further stated that since July 2020, investors who tried to redeem their funds were informed by Qin’s enterprises that their interest amounts would be transferred to another fund. The SEC thinks that those requests are still outstanding and Qin plundered those funds. Furthermore, Qin is actively trying to misappropriating assets from one of his current funds to raise new investment interests.
However, today court officials approved the SEC’s request to freeze assets worth $25 million from Qin and his companies. The regulator has also solicited permanent sanctions against the parties concerned, disgorgement with prejudgment business, and civil penalties. The case isn’t the SEC’s first upon a fund managing crypto assets and designates an expansion of its regulatory crackdown from crypto to those funding in them. Since cryptocurrencies grew to influence over the past couple of years, various crypto funds have risen to gain a new interest in the space.
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