SEC alleges Shima Capital misled investors with false return claims, raising nearly $170M using inaccurate fundraising disclosures.
Founder Yida Gao stepped down weeks after the lawsuit, moving to wind down the $200M crypto venture firm.
Gao agreed to a proposed $4M settlement, including disgorgement and bans, as parallel criminal charges were unsealed.
The U.S. Securities and Exchange Commission sued Shima Capital and founder Yida Gao on November 25, 2025, in federal court. The case, filed in Northern California, alleges investor fraud tied to fundraising disclosures. Three weeks later, internal emails show Gao stepping down and preparing to wind down the $200 million crypto venture firm.
SEC Details Alleged Misstatements and Fundraising Claims
According to the SEC, Shima Capital raised more than $169.9 million from investors between 2021 and 2023. The complaint states Gao used a pitch deck containing material misrepresentations. Notably, the deck claimed a prior investment returned 90 times capital. However, the SEC says the actual return measured 2.8 times.
The agency also alleges Gao contacted investors after learning about an upcoming media report. During those calls, he reportedly described discrepancies as clerical errors. Separately, the SEC accused Gao of misleading five investors in a BitClout special purpose vehicle. According to the filing, Gao kept $1.9 million in undisclosed profits.
Founder Steps Down as Fund Winds Down
Crypto journalist Kate Irwin reported that Gao emailed portfolio company founders after the lawsuit. In that message, Gao said he planned to step down and wind down Shima Capital. He also wrote that he regretted his decisions and apologized to partners. Sources shared screenshots of the email with Irwin.
Founded in 2021, Shima Capital managed roughly $200 million in assets. The firm invested in projects including Berachain, Monad, Pudgy Penguins, Gunzilla, and Sleepagotchi. In a 2023 CoinTelegraph interview, Gao said the firm worked daily to maintain SEC compliance. Fortune later reported undisclosed offshore arrangements involving Gao.
Settlement Talks and Regulatory Response
Bloomberg Law reported that Gao agreed to pay about $4 million shortly after the suit. The SEC outlined disgorgement of $3.92 million plus interest. Gao also consented to injunctions, including an officer-and-director bar, pending court approval.
The SEC charged violations under securities and investment adviser laws. Investigators worked from the Boston Regional Office, according to the agency. A parallel criminal case unsealed the same day involved the U.S. Attorney’s Office and the FBI.
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