June 5, 2023


Complete News World

He is 24 years old and sentenced to 7.5 years in prison after cheating for 775 million.

He is 24 years old and sentenced to 7.5 years in prison after cheating for 775 million.

Investors who trusted Stefan Chen thought they’d found the next big thing – a hedge fund that generated a 500 percent return by taking advantage of the price differentials between cryptocurrencies in 40 cryptocurrencies around the world.

Instead, the 24-year-old math magician has spent the money on a lavish lifestyle, including a $23,000 per month penthouse in Manhattan, and unsuccessful investments in cryptocurrency launches and real estate.

Federal authorities have concluded that Chen defrauded more than 100 people of approximately $90 million, with investments in his Virgil Sigma Fund LP.

Destroyed souls

More than a dozen investors wrote letters to the judge, including several who said they had lost all of their savings to Chen. One woman said she was left homeless and poor.

Chen told the judge he was shocked after reading the letters, many of them from family, friends or business partners.

Chen claims to have developed a special trading algorithm called Tenjin that can make a profit by buying cryptocurrency on one exchange and selling it at a higher price on another.

Soon after founding Virgil, he bragged that the fund generated an annual return of 500 percent in 2017. The Wall Street Journal profiled him in 2018, when he earned $23.5 million. By 2020, he had raised more than $90 million.

“But things started to get worse and people started questioning my promises,” Chen told the judge.

Instead of being honest, my lies were topped with new ones. I thought I was the main character and life was a video game, and I just found a cheat code to beat it. As we know, life is not a video game, says Chen.

See also  Apple is considering offering an iPhone subscription

voluntarily surrendered

Towards the end of 2020, losses peaked, and investors started demanding their money back, without being able to repay.

After that, Chen returned to the United States from South Korea, surrendered to authorities in February and pleaded guilty the same day.

“Chen used a hedge fund as his piggy bank, stole investors’ money to live a lavish lifestyle, and repeatedly lied to investors about what he did with their money,” Assistant US Attorney Daniel Tracer said in a note.

Chen didn’t steal food from a grocery store to feed his family. Investor Steve Reich says he stole more than $90 million from ordinary people and has shown no real remorse.

Chen is now serving a seven-and-a-half year prison sentence for his crimes.