Crypto Ponzi Scammer Bags Seven Years Jail Term

Stefan Qin, an Australian college dropout, has been found guilty of defrauding people to the tune of $90m using digital currencies as cover. Qin, who ran the crypto scam firm Virgil Sigma, lied to his ‘investors’ that their funds will be invested in crypto arbitrages across 45 crypto exchanges and offer more than 450% returns annually.

However, Qin only used these funds to live lavishly, such as renting a $23K per month penthouse in Manhattan. He also spent some of these funds on illegal real estate deals and ICOs, none of which returned any profits.

According to law enforcement agents, over 90 people invested a combined $90m in Qin’s crypto Ponzi firm. A Manhattan US attorney stated that the slogan used by Qin’s firm was “market neutral, safe investments.” However, Qin’s slogan and strategy couldn’t stand for long as investors soon discovered that he used their funds to fund his lavish lifestyle and invest in illicit businesses without making any profits.

Qin’s Claims

Qin lied that his customized trading algorithm called Tenjin was already producing profits for him. He claimed the algorithm helped him buy and sell a digital asset at different exchanges for a profit. He also stated that his firm, Virgil Sigma, was already giving over 450% annual ROI since its launch four years ago.

Three years ago, he was profiled on the wall street journal, which further expanded his reputation and grew its investors’ assets to $90m from $24m. Qin would later confess to Judge Valerie Caproni that investors became suspicious when he couldn’t keep up with his promises because things weren’t working out as expected again. Qin further said that was the time he could have come out clean. Rather, he chooses to invent lies to keep up with his lavish lifestyle.

He also said, “I took life as a movie and considered myself as the main character. I thought I could keep on cheating my way, but little did I know that life would catch up with me sooner than later.” When investors discovered that Qin’s strategies were all lies around the end of 2020, Qin sought to pay them back using funds from his other assets. However, the US SEC had already been informed and had asked exchanges to freeze all the digital assets belonging to Qin or his supposed investment firm.

Qin’s Sentence

While delivering his judgment, Judge Caproni stated that Qin intentionally wanted to defraud investors, especially when he started forging account reports to deceive investors on investing their money. “This crime is no different from any other kind of crime, and it deserves the full punishment according to the law,” the Judge said.

The Judge further stated that Qin’s punishment would deter other criminals or intending criminals. Also, Qin needs to be reprimanded in prison to prevent him from creating new ways to scam the public. 

The legislature remains adamant about regulating the crypto environment in the wake of increasing crypto-related crimes. Furthermore, the SEC chief has often stated that his main objective is to rid the digital asset industry of scams before he completes his tenure, and he remains committed to that cause.