Cryptocurrency fraudster Stefan Qin sentenced to seven-and-a-half years in US prison

The former Canberra "maths whiz" was living the high life in New York, renting a fancy penthouse apartment in Manhattan with the money he swindled from people who were unwittingly investing in a Ponzi scheme.

But reality has come back to bite the 24-year-old, who will soon trade his former life of luxury for a federal prison cell in the United States.

Qin was sentenced in the US District Court earlier this month to seven-and-a-half years behind bars, having previously pleaded guilty to one count of securities fraud.

He was also ordered to forfeit more than US$54 million (A$74 million).

When Qin entered his plea in February, the US Department of Justice announced he had stolen and dissipated "nearly all" of the assets in his US$90 million hedge fund, Virgil Sigma, between 2017 and 2020.

He also tried to steal from a second cryptocurrency fund he had set up, VQR, in a bid to cover his tracks as his house of cards began to fall.

Both funds have now ceased operations, with a court-appointed receiver handling their liquidations and the distribution of any assets that can still be clawed back.

Before being rumbled, Qin, a Radford College graduate, was celebrated as a "maths whiz" in a since-deleted post on the Bruce school's website.

He appeared to be just that as the Wall Street Journal profiled him and Virgil Sigma in 2018, calling him a "crypto wunderkind".

The positive publicity sent new investors flocking to the fund, which had a stated strategy of making market neutral, or safe, investments.

In fact, Qin was using the money entrusted to him on the penthouse rent, food, real estate, speculative cryptocurrency investments and other personal things.

He regularly lied to investors about the location, status and value of their capital, creating false account statements and bogus tax documents.

During Qin's sentencing, he reportedly told Judge Valerie Caproni he was "so, so, so sorry" and "absolutely heartbroken" by the damage he had done.

This included leaving one victim "homeless and destitute".

"I thought I was the main protagonist and life was a video game and I had just found the cheat code to beat it," Qin told the judge, according to the Associated Press.

"As we know, life is not a video game."

MORE COURT AND CRIME NEWS:

Judge Caproni reportedly described Qin as "a potentially very dangerous person" as she sentenced him.

She noted the 24-year-old must be punished severely because "white collar crime is just as devastating to victims as other types of crime".

In a statement following the sentencing, US Attorney Audrey Strauss said Qin's supposed trading strategies "weren't much more than a disguised means for him to embezzle and make unauthorised investments with client funds".

"When faced with redemption requests he couldn't fulfil, Qin doubled down on his scheme by attempting to plunder funds from VQR to satisfy his victim investors' demands," she said.

"Qin's brazen and wide-ranging scheme left his beleaguered investors in the lurch for over $54 million, and he has now been handed the appropriately lengthy sentence of over seven years in federal prison."

Qin has been ordered to report to prison to begin his sentence on December 15.

Once he is freed, he will be subject to three years of supervised release.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: