For cryptos like for any investment, due diligence and monitoring is key. Crooks and frauds abound, and crypto does not escape the lot. Case in point, Virgil Capital and its founder Stefan He Qin who recently pleaded guilty to using $100m of investor money to fund his lifestyle.
The 24-year old Australian geek was supposed to use trading algorithms to take advantage of price movements in a variety of cryptocurrencies, in a market-neutral approach. He claimed that the strategy had been profitable almost every month.
Mr. He Qin notably:
- prepared and disseminated to investors fake reports about the value of their investments.
- prepared and distributed misleading marketing materials and tear sheets.
- filed erroneous K-1s tax reports.
Stefan He Qin is awaiting sentencing, expected in May 2021. He faces 20 years in prison. That’s a life-long sentence for a 24 year old.
How long will he serve? Quoting He Qin from his CNBC interview “Yeah, that’s a good question”.