Stefan He Qin, a 24-year-old Australian crypto fraudster, recently confessed to using a good majority of the $172.5 million AUD that he stole from investors to fuel his sugar baby addiction. The fraudster received a 7-year jail sentence for defrauding investors in a crypto Ponzi scheme.
Qin’s actions are a good lesson to the many Australian investors shifting to cryptocurrencies. Australia is at the forefront of the adoption of cryptocurrencies. Many investors are now investing in digital currencies as opposed to traditional investments, and many are making great profits as a result. However, regulations aren’t moving along as quickly as the industry. This has left Australian investors open to the risk of losses through scams.
While Qin’s scam is not amongst the top crypto scams in history, it certainly resulted in the loss of millions of dollars in investors’ hard-earned money. More than 100 investors from the US and Australia suffered losses at the hands of Qin totalling $172.5 million AUD. He managed this between 2017 and 2020 when he is reported to have taken over the operation of the hedge fund, Virgil Sigma.
How Aussie Crypto Fraudster Stole $172.5 Million AUD
Qin got into cryptocurrencies after he dropped out of the University of NSW in 2016. He moved to China, where he got a job in a crypto exchange. Qin create software that took advantage of the price differences of bitcoin on different crypto exchanges to make a profit by buying and selling bitcoin. He took this software and set up Virgil Sigma Fund with the investment of a hedge fund.
Qin gained recognition as the bitcoin wunderkind in 2018 when his fund had $2.8 million AUD invested. The money continued to flood in after his story was published in the Wall Street Journal. He raised an extra $91 million AUD in just one month thereafter.
However, he had no real way to deploy the funds. He was later interviewed and did something that a fund manager would never do. He gave away competitive opportunities to viewers by suggesting they look for investment opportunities in Eastern and Western markets.
Qin lied to his investors about how the fund was being invested and its performance. He wasn’t actually trading the funds. According to his confession, the fund, and the trades were all fake. He later confessed that he used the funds to bankroll his lavish lifestyle and addiction to sugar babies.
According to Qin, the collapse of the fund came when the senior executives of the fund came together and revealed his activities to the authorities. The executives outlined how he was shifting money between different accounts in order to cover up the fact that the fund was underperforming.
When asked why he did what he did, he said that he was at the lowest point of his life following a ‘break-up’ with his girlfriend as well as a disagreement with the co-founders of his hedge fund. He felt like he was living in a video game.
Qin’s story is a lesson to investors to be more careful when investing in cryptocurrencies and to keep an eye on how their funds are being invested.
