CIMA cancels crypto fraudster’s director registration, fund licences

The Cayman Islands Monetary Authority has cancelled the fund licences and director registration of Australian fraudster Stefan Qin, who stole more than US$50 million from investors in his Cayman-based Virgil Sigma and VQR Multistrategy funds.

In 2021, a US court found Qin guilty of lying to investors and falsifying account statements for his crypto arbitrage fund Virgil Sigma.

He was sentenced to seven and a half years in federal prison and ordered to repay US$54.8 million in criminal forfeiture.

Qin, who pleaded guilty to one count of securities fraud, at one stage claimed that his fund was generating a 500% return by exploiting price gaps between 40 exchanges around the world.

In 2018, The Wall Street Journal profiled Qin, describing the university drop-out as a “crypto wunderkind”. By 2020, he had raised more than $90 million.

But court documents showed that he embezzled investor money to fund his lavish lifestyle, including a US$23,000-a-month Manhattan penthouse apartment, and had made unauthorised failed investments in initial coin offerings and real estate.

When investors made redemption requests in late 2020, Qin attempted to hide losses in Virgil Sigma by moving assets from his second VQR Multistrategy fund, which, it was alleged, was created explicitly for that purpose.

“Instead of coming clean, I did the worst thing and doubled down on my lies,” Qin told the judge at the time. “I thought I was the main protagonist and life was a video game and I had just found the cheat code to beat it.”

The US Securities and Exchange Commission obtained an asset freeze against Qin and the funds in December 2020 and had receivers appointed a month later.

CIMA’s decisions in relation to Qin, Virgil Sigma and the VQR feeder fund, took effect earlier this month according to the notices published on 28 December.