US Judge Sentences Crypto Hedge Fund Scammer To Over Seven Years In Prison (tomshardware.com) 28
The U.S. Department of Justice announced Wednesday that Stefan He Qin, the founder of two cryptocurrency-focused hedge funds who pled guilty to securities fraud in February, has been sentenced to 90 months in prison for his actions. Tom's Hardware reports: Qin's funds were called Virgil Sigma and VQR. Both were supposed to offer investors a way to profit off the crypto market that "was not exposed to any risk from the price of cryptocurrency moving up or down and therefore provided a relatively safe and liquid investment." Those claims didn't seem to attract much scrutiny; the DOJ noted that The Wall Street Journal actually profiled Qin in 2018 to celebrate his fund's apparent success. But U.S. Attorney Audrey Strauss said in a statement that Qin's funds were actually devoted to his personal gain rather than solid financial returns for investors: "Qin's investors soon discovered that his strategies [emphasis Strauss'] weren't much more than a disguised means for him to embezzle and make unauthorized investments with client funds. When faced with redemption requests he couldn't fulfill, Qin doubled down on his scheme by attempting to plunder funds from VQR to satisfy his victim investors' demands. Qin's brazen and wide-ranging scheme left his beleaguered investors in the lurch for over $54 million, and he has now been handed the appropriately lengthy sentence of over seven years in federal prison." The DOJ said that in addition to the 90-month prison sentence, Qin "was also sentenced to three years of supervised release, and ordered to forfeit $54,793,532" and that "the Virgil Sigma fund and VQR have ceased operations and the liquidation and distribution of assets is being handled by a court-appointed receiver."
Durr (Score:2)
Why do people think nobody is going to check on where the money is?
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Why do people think nobody is going to check on where the money is?
Because nobody checked Bernie Madoff or Charles Ponzi.
Re:Durr (Score:5, Interesting)
Madoff was well-connected, and in fact hadn't spent or hidden the money but had deposited in bank accounts and so had the money readily available to pay out when investors pulled their money.
Charles Ponzi was a con-man in an age where people still had little access to information, and so was easily able to sell his scheme as arbitrage; which still often existed at that time.
This clown had the money (that he didn't personally spend) tied up in non-liquid investments and had no chance to avoid detection.
When Madoff was busted, he still had about 50% of the money that had been "invested." It was hard to catch him, because he could still pony up the money when people asked for it.
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Madoff was well-connected, and in fact hadn't spent or hidden the money ...
When Madoff was busted, he still had about 50% of the money that had been "invested."
Why did Madoff only have half the money if he hadn't spent it? The truth is that he had spent a lot of it, mostly on himself (including charitable contributions he made to make himself look good), but also on his employees whom he paid to generate the fake statements.
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Because a bunch of his "investors" made net profits when they withdrew the funds!
He was doing it just for the fees, fees that would have been legit if the returns had been legit.
He had half the money left that had actually been deposited. That was only something like 15% of what people thought they had in, because of the fake gains.
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Whenever I hear of a big crypto scam like this, I wonder if it's a calculated theft with the intention to serve a few years, have your crypto stashed away, and come out golden. If he gets early release, 4 years in prison for $54 million is a good deal.
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I think it depends upon how that crypto he owns is held. Surely the feds are going to grab what they can. Unless he has some accomplices managing the rest, there's no telling whether it will still be there when he gets out or even if the crypto currency he holds will still exist. And if his accomplices are not quite as honest as he needs them to be, they'll be the ones in the Caymans. What is he going to do about it in prison and what information about his stash can he trust?
Safety deposit box with a 99 year/lifetime lease. (Score:2)
In your mother's maiden name.
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I'm not a crypto expert, but as far as I see, all you need to do is stash your wallet somewhere until you get out. That could be physically stashing it under a rock in a national park, or encrypting it in plain sight all over the internet. If you could encode it and encrypt it in such a way as the Wayback Machine archives it for you, then as long as you remember your password, and how its encoded, you're golden.
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It is like hiring an accountant to keep your books but then going over the books every day to make sure the accountant is recording everything correctly. At that point, you may as well fire the acco
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Many floogles are fuzzles.
Prison only requires one floogle to not be a fuzzle.
You're going to prison: T/F
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Butthurt that you don't hold any?
Lunghurt that pieces of shit still mine it
An illustration (Score:4, Interesting)
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Because at its heart, crypto is a fancy ponzi scheme.
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Cryptocurrencies are good for only 2 things:
1) Facilitating illegal transactions
2) Speculating (not investing!)
Maybe that will change at some point, but in the here and now, that's it.
Figures (Score:2)
Take anyone busted for really big fraud and look back a few years and you'll find articles singing their praises as a new darling of Wall Street. They never learn.
And there's always a new one who sees that and believes they can get away with it by just not making that one mistake.
Makes you wonder how many ARE getting away with it right now.
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That depends on what you think I am calling out. Basically, Wall Street sucks at spotting huge red flags when it showers adoration upon success. Other evidence suggests that it often mistakes a run of good luck for uncanny skill at picking winners and promptly forgets all about the former winner when their picks regress to the mean rather than learn that it was just a good run.
Financial crime (Score:2)
Armed robbery is a suckers game. At best you get a few tens of thousands and spend decades in a max security jail.
Fraud snags millions and usually nets a few years down the low security farm.
The crypto is irrelevant in this. (Score:2)
was not exposed to any risk from the price of cryptocurrency moving up or down and therefore provided a relatively safe and liquid investment.
The only way that is possible is if one is either operating a trading house that takes a cut or if one is mining crypto with stolen electricity. Any investment that says there is no risk from the price of the underlying commodity or equity is a scam. It doesn't matter if it is cyptocurrencies, NFTs, stocks, or mortgage derivatives. If the risk is divorced from the price of the underlying instruments then it is not related to