Internal email suggests orderly shutdown following fraud allegations by US regulator
The future of crypto venture firm Shima Capital has come under scrutiny after screenshots of an internal message surfaced online, suggesting plans for an orderly wind-down. The development follows a recent US Securities and Exchange Commission (SEC) lawsuit accusing the firm and its founder of misleading investors during fundraising efforts.
SEC Alleges Misrepresentation in Fundraising
The SEC has charged Shima Capital Management LLC and founder Yida Gao with making false and misleading statements while raising nearly $170 million between 2021 and 2023. According to the complaint, marketing materials overstated prior investment performance, including claims of a 90x return that the regulator says was closer to 2.8x. The SEC also alleges these inaccuracies were downplayed as clerical errors when challenged.
In a separate allegation, the SEC claims Gao raised $11.9 million through a special purpose vehicle tied to BitClout tokens. While investors were told purchases were discounted, the regulator alleges Gao sold tokens at a markup and retained $1.9 million in undisclosed profits.
Email Points to Leadership Exit and Wind-Down
Screenshots shared publicly appear to show Gao stepping down as managing director and outlining an orderly wind-down overseen by independent advisers. The message reportedly emphasizes that the legal actions relate to personal conduct and not portfolio companies.
Founded in 2021, Shima Capital launched a $200 million debut fund and invested in numerous blockchain projects. While the email’s authenticity has not been independently confirmed, the situation has raised concerns about the firm’s long-term viability amid ongoing regulatory action.
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