Cryptocurrency fund manager Stephen He Chen has pleaded guilty to a fraud charge filed against him in federal court in New York in connection with a $90 million fraud, according to a report. to source.

The 24-year-old has founded and managed the Virgil Capital Fund since 2016, presumably handling millions of dollars in client investments.

The profits made from the investment fund he created made him a famous and financial expert to be hosted on “CNBC”, and the famous financial newspaper “WSJ” referred to him more than once.

.Tweet embed From Virgil Capital is a 21 year old hedge fund manager who has a way to make money # bitcoin Whether it goes up, down, or nowhere at all pic.twitter.com/loQrB7f0zH

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CNBC Fast Money (CNBCFastMoney) February 27, 2018

This popularity has led to many clients pouring their money into the fund.

Chen claimed that he used an arbitrage strategy (crypto arbitrage based on spreads across different cryptocurrency exchanges) to make his money.

But things were turned upside down in 2019 when investors demanded their dividend.

At the time, Chen kept procrastinating on clients’ requests before resorting to a nefarious way of fulfilling the demands: he set up another fund, tried to raise more money (on his laurels), and then tried to pay off the early investors.

This resulted in an investigation that eventually uncovered a $90 million scam.

Audrey Strauss, the US attorney representing the victims, said:

Chen drained nearly all of the assets from his $90 million crypto fund, stole investor money, and lied to investors about the fund’s performance.

Real estate and luxury life:

In a statement, Responsible Special Agent Peter Fitzhog said the Virgil Fund and VQR, the two funds under the control of Virgil Capital, were used by Chen to fund a luxury lifestyle.

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This included renting an expensive apartment in New York, buying hundreds of thousands of dollars in real estate, and participating in ICOs, most of which have gone almost to zero in recent years.

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Fitzhog added that the criminal scheme continued for many years, with Chen making many misrepresentations and false promises that convinced investors to pump millions of dollars into his trading strategies.

On the other hand, Chen is scheduled to hold a court hearing in May this year.

Chen faces up to 20 years in prison.

Witness from the story is the absolute distrust and handing over your money to others to invest on your behalf especially in the risky crypto market which is also unregulated in many areas.

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