The Securities and Exchange Commission obtained an order imposing an asset freeze and other emergency relief against cryptocurrency fund manager Virgil Capital and its affiliated companies. The action was taken due to alleged securities fraud related to its flagship cryptocurrency trading fund, Virgil Sigma Fund, and its VQR Multistrategy Fund, the SEC said Monday.
In a complaint filed Dec. 22 in the U.S. District Court for the Southern District of New York, the SEC alleged the fraud was directed by Stefan Qin, an Australian citizen and part-time resident of New York, who owns and controls Virgil Capital and its affiliated companies.
Qin, 23, was named in the suit as a defendant, along with Virgil Capital and four affiliated companies. Virgil Capital did not immediately respond to a request for comment Tuesday.
According to a CoinDesk report citing the SEC, he allegedly failed to redeem $3.5 million in investments and attempted to withdraw $1.7 million in investor funds “to pay off Chinese loan sharks.”
“Qin has perpetrated a scheme to lure investors into the two Funds, which are marketed as using algorithmic trading strategies involving cryptocurrencies, using false promises and assurances,” the complaint alleges.