In December 2020, hedge fund founder Stefan Qin was accused of fraud by SEC after conning $90 million through crypto fraud. Now, the victims of the fraud are seeking the maximum sentence for the 24-year-old college drop-out.
At first, Stefan Qin’s unknowing investors thought they had stumbled upon a hedge fund that was generating 500% returns by exploiting price gaps between cryptocurrencies on 40 exchanges around the world. However, this turned out to be a ruse and the 23-year-old was actually putting their money towards his own lavish lifestyle.
Stefan Qin was living the high life in a $23,000 per month Manhattan penthouse and had a history of failed investments in initial coin offerings and real estate. When he was charged, prosecutors said that Qin had defrauded around 100 people out of $90 million.
Months after his initial arrest, Qin’s victims are now urging U.S District Judge, Valerie Caproni, to put Qin behind bars at his sentencing on Wednesday. He will be sentenced for securities fraud in New York.
Ying Lui (41) lost $350,000 in savings and has said, “I feel like it is about time that the criminal justice system actually does what it is intended to do,” adding, “Keep the criminals locked up, and the community safe. I can’t bear the fact of this happening to someone else again. I can’t have that on my conscience, can you?”
Lui has urged Caproni to sentence Qin to the maximum sentence allowed by law explaining that his actions have affected hundreds of people and families around the world. More than a dozen other affected investments also wrote to the judge, including a number who claim that they lost their life savings to Qin. One woman said that she was left “homeless and destitute”.
Qin claimed that he had in fact developed a special trading algorithm called Tenjin that could earn impressive profits by buying a cryptocurrency on one exchange and selling it on another for a higher price. Qin bragged about the 500% returns of his fund in 2017 and the Wall Street Journal wrote a profile on him in 2018. By 2020, he had raised around $90 million in investments.
It was near the end of last year that investors started to demand their money back. Qin attempted to make the payments by raiding another fund that he had founded but the U.S Securities and Exchange Commission got exchanges to freeze these assets. Qin then surrendered in February and pleaded guilty to his crimes on the same day.
At first, prohibition officials recommended a sentence of 96 months due to his clear criminal record and voluntary return from overseas to face his charges. However, others urged for a tougher sentence due to the ‘brazen nature’ of Qin’s crime.
“Qin used that hedge fund as his own piggy bank, stealing investor money to live a lavish lifestyle and repeatedly lying to investors about what he was doing with their money,” Assistant U.S. Attorney Daniel Tracer said.
Qin’s sentencing will take place on Wednesday in New York, Manhattan.
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