‘This is where greed gets you’: Stefan Qin says he committed $90 million crypto fraud to spite his high school bullies.
‘This is where greed gets you’: Stefan Qin says he committed $90 million crypto fraud to spite his high school bullies. Photo: Screenshot, EST Media

24-Year-Old Aussie Jailed for $100m Crypto Scam Blames High School Bullies

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A former cryptocurrency hedge fund manager who was sentenced to seven and a half years in a US federal prison last year says he lied about his investors’ returns to avoid falling short of their expectations, which he said he was afraid would expose him to bullying. 

In an interview with a little-known media company posted to YouTube, Canberra-born crypto fraudster Stefan Qin said his role in the swindling of $US90 million from Australian and US investors between 2017 and 2020 was the result of years of bullying through high school and the pressures he felt from his Asian heritage to succeed.

“I felt immense pressure to inflate the returns and to just lie because I needed to match the expectations. They have this image in their head of this wunderkind who could make them a lot of money, and unless I met that image, I was a failure, right?,” Qin said. 

“And maybe I’d go back to being bullied again; maybe people would go back to making fun of me and I would never have friends again.”

Between 2017 and 2020, Qin was found to have stolen and later dissipated nearly all of the assets controlled by his flagship hedge fund, Virgil Capital, according to the Department of Justice, and tried to steal millions more from a secondary fund in order to repay investors he had fleeced. 

Come February 2021, Qin faced a federal court, where he pled guilty to one count of securities fraud. 

At the time, the US attorney’s office claimed Qin had lied about countless returns on his $90 million fund and took money from its accounts to fund personal expenses, including the $US24,500-a-month New York City apartment where the YouTube interview was filmed. 

“It could have been much worse, given the magnitude and the scale of the fraud,” Qin said. “In fact, if they knew the actual amount, like, the $100-plus million, it would have been a different story, because $100-plus million is very different, right, to $90 million.”

In the interview — which at one point pictures Qin shadowboxing, clad in gloves, preparing for what he predicts will be a violent prison stay — Qin flirts with self-awareness, suggesting his corporate missteps were the product of relentless high-school bullying.

“Up until year six, I was probably in a pretty good place, but after that is when the bullying really started, because that’s when girls came into the picture. And unfortunately, I was not quick to adapt to those situations,” Qin said. 

“And very, very quickly I became the target and focus of a lot of harassment and bullying that led me to like… some extreme depression and suicidal tendencies from when I was in year seven and eight,” he said. 

Later, Qin went on to say he felt he needed to defraud investors to curb pressures he felt from his Asian heritage. 

“There’s probably, like, this huge insecurity in the Asian community to, like, just be as successful as possible at all costs. And even, like, just this focus on, it’s not even about the money — it’s just looking good,” Qin said. 

“I would say that later on that showed up in, like, the worst way possible, where I would just keep raising money, I would keep doing my thing. And in the back of my mind, I would always be thinking, ‘Well, you know, fuck you. I’m more successful than you guys now.’”

For a while, he really was. After dropping out of UNSW after one year in 2016, Qin moved to China, where his sister took him in and he landed his first job in crypto, as an arbitrageur at the Chinese crypto exchange, Okcoin. 

Crypto arbitrageurs are at the centre of the age-old investing strategy, “arbitrage”. The play allows firms to make major profits on a stock or coin — in Qin’s case, mainly Bitcoin — that trades at different prices on different platforms, by moving on discrepancies. 

Where the coin is available at various outlets, arbitrageurs will buy low, then sell high. Or, “capture the arb”, as it’s otherwise known. In regulated securities markets, it isn’t as common, but in crypto, arbitrageurs are prolific.

Qin made a fortune doing it, and used his winnings to start Virgil Capital, a crypto hedge fund in 2016. By 2017, Qin was reportedly managing $23.5 million, and his fund was delivering a 500% return for investors. 

It was a noteworthy feat that didn’t go unnoticed — particularly by the financial press. In February 2018, Qin secured mainstream bona fides when he was profiled by the Wall Street Journal, where he was portrayed as a sort of Bitcoin wunderkind. 

Three days before heading to prison, he said the ambition to exceed those expectations was at the root of a lot of what drove him to leave investors in the lurch for about $US54 million. He said it only made him greedier. 

Offering the cameraman a tour of his New York City apartment, describing its Instagram potential, Qin said: “It’s very rare for New York to look like this — this is where greed gets you.”