<img border="0" src="https://cdn.china.com.au/wp-content/uploads/2021/02/15110710/20210215000709-6029bb2daaac8.jpg" style="margin-left:auto;margin-right:auto"/><br />
More than a year after the fund was established, he boasted that the fund's return rate was 500%. This statement triggered a new funding frenzy among investors.
Federal prosecutors stated that, in fact, everything Qin said was a lie. In essence, it was a Ponzi scheme. About 100 million US dollars were stolen from more than 9000 investors, all of which were used to pay for Qin’s extravagant lifestyle, and Personal investment in high-risk bets such as initial coin offerings.
"I know what I did was wrong and illegal," he told the U.S. district judge.Caproni may sentence him to more than 15 years in prison. "I deeply regret my actions and will use the rest of my life to make up for it. My selfish actions have caused harm to investors who trusted me, my employees and my family. I apologize for that."
The case echoes similar cryptocurrency scams such as BitConnect, which promised people a double-digit and triple-digit return, but cost investors billions of dollars.Such a Ponzi scheme shows that investors eager to make money in the hot market can easily be led astray by promises of huge returns.
Due to fraud, the Canadian exchange QuadrigaCX collapsed in 2019, causing at least $7.6 million in losses to 1.25 investors.
Although the regulation of the cryptocurrency industry is tightening, the industry is full of inexperienced participants.There are about 800 crypto funds around the world, many of which are run by people who know nothing about Wall Street or finance, including some college students and recent graduates who founded the fund a few years ago.
2016年，他被悉尼新南威尔士大学(University of New South
He told DigFin that he discovered a cryptocurrency trading vulnerability after an internship at a Chinese company.His task is to establish a platform between China and the United States to allow the company to realize arbitrage on cryptocurrencies.
Qin Gang was convinced that he stumbled upon a promising business, so he moved to New York to start Virgil Capital.He told investors that his strategy will be to use the trend of cryptocurrency trading at different prices in different exchanges.He will remain "market neutral", which means that the company's funds will not be affected by price fluctuations.
He told DigFin that unlike other hedge funds, Virgil does not charge management fees and only charges fees based on the company's performance.Qin said, "We never try to make easy money."
According to his description, Virgil got off to a smooth start. In 2017, he obtained a 500% return, attracting more investors eager to participate.According to legal documents, one of his marketing manuals claims a monthly return rate of 10%, that is, the three-year return rate as of August 2019 was 8%.
The Wall Street Journal introduced him in an article in February 2018, boasting about his skills in cryptocurrency arbitrage, after which his fund began to accelerate.Prosecutors stated that Virgil "has achieved substantial growth with the influx of new investors."
"It's mid-December, and my million dollars are gone," one investor wrote, not revealing his name in court documents. "The way you treat yourself as one of the earliest and largest investors is disgraceful."
检察官说，大约在同一时间，投了350万美元资金的九名投资者，要求该公司旗舰基金Virgil Sigma Fund
The prosecutor said that Qin did not trade on 39 exchanges around the world as he claimed, but instead used investors’ funds for personal expenses and invested in other undisclosed high-risk investments, including initial coin offerings ( ICO).
Qin said that loan sharks "may do everything possible to recover their debts," and his "liquidity problems" prevent him from repaying loan sharks.
"To be honest with you, my cash flow management is terrible," Qin told Harak. "I have no money now, man. It's very sad."
When the trader refused Qin's withdrawal request, Qin tried to take over VQR's account.But the Securities and Exchange Commission has stepped in, allowing the cryptocurrency exchange to freeze the remaining assets of VQR and file a lawsuit a week later.
In the end, Qin drew out almost all of the 9000 million dollars from the Sigma Fund.A spokesperson for the Manhattan federal prosecutor said that the administrator appointed by the court to oversee the fund is seeking to recover assets for investors.He said that approximately $2,400 million of assets in the VQR fund have been frozen and should be refundable.
The prosecutor said that Qin Gang agreed to fly back to the United States after learning the results of the investigation in South Korea, surrendered to the authorities on February 2, pleaded guilty before a judge, and was released after paying $4 in bail, pending sentencing on May 5.Although the maximum statutory penalty is 5 years in prison, the prosecutor agreed in the plea agreement that according to the federal sentencing guidelines, he should be sentenced to 20 to 20 months in prison and a fine of up to 151 US dollars.
This fate is far from the career prospects his parents envisioned for him-he told DigFin that he would become a physicist.
"When I told them I left university to do this crypto thing, they were not happy. Who knows, maybe one day I will complete my degree. But what I really want to do is trade cryptocurrency."
[Welcome to the news to discuss cooperation! 】WeChat subscription account: news-china-com-au