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The Australian founder of a pair of cryptocurrency hedge funds has pleaded guilty to securities fraud in a U.S. court after frittering away around US$90 million of investors’ funds.

Stefan He Qin, the man behind a pair of hedge funds focused on the emerging crypto sector, was charged with securities fraud amid allegations that he diverted assets from one of his funds for personal expenses and to unrelated investments.

According to the U.S. Department of Justice (DoJ), Qin founded two crypto-focused hedge funds: Virgil Sigma Fund LP, which was pitched as a market-neutral arbitrage fund, and VQR Multistrategy Fund LP.

“For years, Qin stole investor money from Virgil Sigma and, in December 2020, Qin tried to steal investor money from VQR to pay back his investors in Virgil Sigma,” the DoJ said, noting that Qin dissipated almost all of the US$90 million investors provided to the fund and lied to investors about the fund’s value.

‚ÄúVirgil Sigma and VQR, two multimillion-dollar cryptocurrency investment funds, were revealed to be slush funds for Qin to live his extravagant lifestyle,” said Peter Fitzhugh, special agent in charge of Homeland Security’s New York office, in a statement.

Qin pleaded guilty in a Manhattan court. He will be sentenced on May 20.