While the cryptocurrency space is agog with Ripple’s battle with the Securities and Exchange Commission (SEC), the US watchdog is going after Virgil Capital’s founder, Stefan Qin.
The Commission is accusing the 23-year old hedge fund founder of fraud. According to the SEC, Qin fabricated records and has failed to pay $3.5 million in investments to investors. Furthermore, he attempted to withdraw $1.7 million in investor funds to pay off Chinese loan sharks.
In total, the Commission has level 6 complaints against Qin. An excerpt from one of the complaints alleges that:
Defendant Stefan Qin has been engaged in a deceptive course of conduct, using materially false and misleading statements to investors and others, causing serious harm and the threat of further harm to two funds he controls, the Virgil Sigma Fund LP (the “Sigma Fund”)and the VQR Multistrategy Fund LP (the “VQR Fund”).
On Tuesday, the Commission applied to Lorna Schofield, a U.S. District Judge to issue an emergency order suspending $25 million in digital assets owned by another fund managed by Qin.
Qin is believed to be currently in South Korea. According to his lawyers, he is prepared to cooperate with the SEC and ensure investors are not harmed. Although the SEC is seeking an order to permanently restrain Qin from selling security, investors may be in for a long and possibly never-ending journey of recovering their funds.