The United States Securities and Exchange Commission (SEC) has announced that it has gained an Emergency Asset Freeze order against the cryptocurrency fund manager Virgil Capital after charging the firm with fraud. As per an official press release published on the 28th of December, SEC has been granted this emergency freezing order from a New York court.
With an emergency asset freeze order in hand, the United States agency has got the right to freeze the assets of Virgil Capital as well as its affiliates and its managing partner Stefan Qin. The agency will now impose “an asset freeze and other emergency relief against Virgil Capital LLC and its affiliated companies in connection with an alleged securities fraud relating to Virgil Capital’s flagship cryptocurrency trading fund, Virgil Sigma Fund LP.”
SEC has charged the founder of Virgil Capital Stefan Qin saying that he along with his entities has defrauded investors in Sigma Fund. As per the complaint, the SEC said that Qin has misrepresented the fund’s assets, financial condition, and strategy to investors. SEC further said in its press release:
“The defendants misled investors to believe their money was being used solely for cryptocurrency trading based on a proprietary algorithm, while Qin and the entities used investment proceeds for personal purposes or for other undisclosed high-risk investments.”
As per the accusations of the SEC, the agency said that Qin made an attempt for withdrawing investor funds worth $1.7 million and also could not redeem investments worth $3.5 million as well.
While talking about the emergency freezing order against Virgil Capital, the Chief of the SEC Enforcement Division’s Cyber Unit Kristina Littman said that the emergency freeze order given by the New York court signifies a crucial step towards ensuring the protection of investors and to make sure that they do not face any further harm by fraudsters. Kristina said that the founder of Virgil Capital urged investors by making false promises to them. After that, he did not stop and continued his deception for concealing “his misuse of investor funds.”
Over the past few days, SEC has tightened its grip over cryptocurrency firms. Last week, it sued the San Francisco-based blockchain payments behemoth Ripple saying that it allegedly sold $1.3 billion worth of unregistered securities.