US regulator alleges crypto fraud by Australian
29 Dec 2020

The top US securities regulator has obtained an order imposing an asset freeze and other emergency relief against Virgil Capital LLC and its affiliated companies.

The Securities and Exchange Commission said it took action “in connection with an alleged securities fraud relating to Virgil Capital’s flagship cryptocurrency trading fund, Virgil Sigma Fund LP”.

The SEC said it alleges that the fraud was directed by Stefan Qin, an Australian citizen and part-time resident of New York, who owns and controls Virgil Capital and its affiliated companies.

According to the SEC’s complaint, “Qin and his entities have been defrauding investors in the Sigma Fund since at least 2018 by making material misrepresentations about the fund’s strategy, assets, and financial condition”.

The complaint “alleges that the defendants misled investors to believe their money was being used solely for cryptocurrency trading based on a proprietary algorithm, while Qin and the entities used investment proceeds for personal purposes or for other undisclosed high-risk investments”.

The SEC said that 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.

By Timothy Moore, The Australian Financial Review, 29 December 2020

Read more at The Australian Financial Review

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