Fund manager accused of stealing bitcoins to pay Chinese moneylenders

Charlie Taylor

The United States Securities and Exchange Commission (SEC) filed a lawsuit against Stefan Quin, creator of the cryptocurrency fund Virgil Capital, for defrauding investors and trying to withdraw $ 1.7 million to allegedly pay Chinese moneylenders.
The Virgil Capital fund has around US $ 92 million in crypto assets under management and moved money between different trading platforms to profit from price differences. The SEC is accusing the fund manager for, in addition to other accounting tricks, tampering spreadsheets on 39 cryptocurrency trading platforms in 2019.
In addition to accounting fraud, Quin is accused of trying to steal $ 1.7 million in investor funds to pay Chinese moneylenders, the SEC says. The American agency asked the court to freeze $ 25 million in crypto managed by Quin.
The manager is believed to be in South Korea at the moment, and is "committed to ensuring that no investors are harmed," his lawyers told Reuters.Coinext 760x150

The problem of trust

An old saying within the cryptocurrency market can exemplify this case very well: “Not your keys, not your coins”. Bitcoin emerges exactly as a tool that limits the need for trust to third parties in financial matters.
Outsourcing the custody of crypto assets can add a risk to those who wish to entrust their cryptocurrencies to institutions. And this can be an increasingly debated issue as more and more resources are now entrusted to cryptocurrency investment funds.
It is estimated that only the Greyscale Bitcoin Trust (GBTC) has around $ 14 billion in bitcoin under management. This certainly makes these institutions the target of attacks (internal and external) by malicious agents.
Despite the risk, many tools, such as the use of multisig portfolios, can be used to minimize the chance of theft of assets within institutions. In addition, several cryptocurrency funds are linked with renowned institutions, generating more confidence for the market. This is the case of Vitreo, a fund managed by the renowned and well-known Qr Capital and regulated by the CVM.
So, before investing in funds, see who your managers are.
What did you think of this whole story? Do Chinese loan sharks have good loan terms? Leave it there in the comments section below.
Read more: While institutions adopt Bitcoin, retail interest remains low

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