A former cryptocurrency hedge fund manager who pleaded guilty to securities fraud after prosecutors said he ran a Ponzi scheme was sentenced to seven and a half years in prison, the US attorney’s office for the Southern District of New York said Wednesday.
From 2017 to 2020, 24-year old Stefan Qin stole and dissipated nearly all of the assets of his $90 million flagship hedge fund, and attempted to steal millions from a secondary fund to pay back investors, according to the Department of Justice.
Qin pled guilty to one count of securities fraud in federal court in February. Now the trader, who was the subject of a Wall Street Journal profile for his cryptocurrency arbitrage skills in 2018, is facing a prison sentence.
According to the US attorney’s office, Qin lied about returns on his $90 million fund and took money from its accounts to fund personal expenses, including a penthouse apartment in New York City. The office also said over 100 investors in Qin’s fund were scammed.
“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,” US Attorney Audrey Strauss said.
According to the Wall Street Journal, federal sentencing guidelines called for nearly 20 years in prison, but US District Judge Valerie Caproni said those recommendations were draconian. Qin’s lawyers had asked for a two-year sentence, but the judge landed on a sentence that would dissuade others from committing similar white collar crimes, the Journal said.