Regulation

SEC Obtained Freezing Order Against Virgil Capital Trading Company

virgil capital

The SEC obtained freezing order against Virgil Capital trading company and its affiliates as well as the Managing Partner Stefan Qin as we can see in today’s crypto news.

The New York court granted the SEC the right to freeze assets under control by Virgil Capital but the regulator alleged that the company and its managing director defrauded investors. Instead of putting funds towards a crypto trading bot, it made off-the-book investments. The US Securities and Exchange Commission announced today that the New York court granted them the right to freeze assets of the Virgil Capital LLC group and the managing partner Stefan Qin.

SEC Obtained a freezing order for misappropriating money as Qin allegedly told investors he was earmarked for a crypto trading bot. The SEC obtained the rights to freeze the assets of the company which amounts to $12 million over the allegations that Qin defrauded investors via the Virgil Capital Sigma Fund that was created in 2018 by misrepresenting strategies and assets:

“SEC Obtains Emergency Asset Freeze, Charges Crypto Fund Manager with Fraud https://t.co/GPcC2e8duI

— SEC_News (@SEC_News) December 28, 2020

The regulator alleged that the 23-year old Australian that had opened offices in New York and Shanghai and was believed to reside in Seoul, misled investors by telling them that he will invest their money into a crypto trading algorithm that made huge profits because of the price differences between exchanges. However, he and his affiliates allegedly used the money for personal purposes or other high-risk investments. SEC’s Cyber Unit Chief Littman said:

“Qin allegedly made false promises to lure investors and then continued his deception to conceal his misuse of investor funds.”

When investors tried to take their money out, the SEC said that Qin convinced them to move them to the Sigma Fund which was his $25 million VQR MultiStrategy Fund. Qin told the investors that the bank delayed the transaction between the two funds as the SEC alleged:

 “In reality, the wire transfers were rejected because there were not sufficient funds in the Sigma Fund’s account to complete the wire transfers.”

The SEC complaint filed in the Southern District charges Qin and Virgil Technologies LLC, Virgil Quantitiative Resarch LLC, and Virgil Capital LLC with its partners with violations of the antifraud provisions of the federal securities laws. The action seeks to ban the company’s operations, orders the operators to return money to investors, and force them to pay civil penalties.

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