SEC uncovers multimillion-dollar cryptocurrency fraud
The SEC has sued the founder of Virgil capital, alleging he engaged in cryptocurrency fraud worth millions of dollars. The SEC said the founder tried to withdraw $ 1.7 million from the company to pay Chinese loan sharks, and that he had been involved in counterfeiting on some cryptocurrency exchanges, such as Coinbase.
The U.S. Securities and Exchange Commission (SEC) has sued Stefan Qin, founder of Virgil Capital, a $ 92.4 million cryptocurrency fund, for allegedly defrauding investors. The lawsuit filed on Tuesday said founder Qin lied about his fund investments and also tried to attract $ 1.7 million in investments to pay Chinese loan sharks, Westlaw Today reported.
As a result of the lawsuit against Stefan Qin, the 23-year-old founder of New York-based Virgil Capital, the SEC has asked the court to freeze $ 25 million in cryptocurrencies held in another fund owned by Qin. In addition, Stefan Qin’s lawyers wanted to cooperate with the SEC and prevent investors from being harmed by providing concrete evidence.
Forged through Sigma fund
According to the disclosures, Qin enabled investors to trade cryptocurrencies through the Virgil Sigma Fund, which he founded when he was 19. According to the SEC’s complaint report, 39 cryptocurrency exchanges were tampered with in spreadsheets that track investments made through Sigma. In 2019, Sigma listed an average of $ 2 million in assets per month on the Kraken, Coinbase and Gemini cryptocurrency exchanges, but Sigma never owned these assets.
It was also learned that the Sigma fund was behind the payment that Qin wanted to make to the loan sharks. Founder Qin received $ 1.7 million from Chinese loan sharks to invest in Sigma, according to testimony.