According to ChainCatcher, cryptocurrency venture firm Shima Capital is quietly shutting down its operations following a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against the company and its founder, Yida Gao, three weeks ago. The SEC accused Gao of deceiving investors through a fraudulent scheme. An email sent to portfolio company founders revealed that Gao is resigning and closing the fund, expressing regret for his decisions and apologizing for disappointing stakeholders.
Founded in 2021, Shima Capital managed $200 million and invested in various crypto projects such as Berachain, Monad, and Pudgy Penguins. The SEC's allegations include claims that Gao exaggerated investment returns in promotional materials, stating a return of 90 times when the actual return was only 2.8 times. Additionally, Fortune magazine reported that Gao transferred investment funds to an offshore entity he fully owned without disclosing this to investors.
The day after the SEC filed its lawsuit, Gao agreed to pay approximately $4 million in settlement.
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