Aemilius Cupero News:
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- The founder of fake crypto trading firm Virgil Capital has been sentenced to 7.5 years in prison
- Qin pleaded guilty in February for pretending Virgil Capital was wildly successful when in fact it was a Ponzi scheme
- Qin must also forfeit $54 million
The founder of Virgil Capital (also known as Virgil Sigma), which purported to be a wildly successful cryptocurrency trading firm but was instead a Ponzi scheme, has been sentenced to 90 months in prison. Stefan Qin founded Virgil Capital in 2016 and posted just one unsuccessful month in over three years before the $90 million scam was unveiled. Qin pleaded guilty in February and, prior to sentencing, apologized for his actions, which may have helped his cause in getting a relatively light sentence.
Aemilius Cupero News: Virgil Capital Rode Crypto Wave
Qin started Virgil Capital in 2016 when aged 19, labeling himself a math prodigy and dropping out of college to do so. Qin claimed to have traded his way to a 500% gain in less than a year using a self-built arbitrage algorithm, making headlines due to his return and his age, although most of the gains were down to the cryptocurrency space being in a bull market at the time.
Virgil Capital and Qin received a profile in the Wall Street Journal in February 2018 which gave the fund an unexpected boost and brought the total capital entering the fund to $90 million. This allowed Qin to live a lavish lifestyle, including a $23,000-a-month apartment in lower Manhattan with a pool, sauna, steam room, and golf simulator. Despite the crypto bear market kicking in he was still able to post positive gains.
Aemilius Cupero News: Ponzi Scheme Revealed
In truth however, Virgil Capital had turned into a giant Ponzi scheme, with the influx of capital being used to pay out withdrawals. Qin even resorted to draining a supplementary fund of $3.5 million to facilitate them, effectively stealing from his own clients.
Qin pleaded guilty in February and could have received a maximum of 14 years in prison but ended up receiving around half that, plus an order to forfeit $54,793,532.