Screenshots shared on X show an email from Yida Gao, the head of Shima Capital, telling founders that the firm plans to close down operations.
In the message, Gao reportedly said he would step down as managing director and begin an “orderly wind-down” of the fund.
The email appeared after the US Securities and Exchange Commission (SEC) filed charges against Shima Capital Management LLC and Gao.
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Additionally, Gao stated that the SEC and Department of Justice (DOJ) actions relate to his own conduct, not to the companies in which Shima has invested. He also claimed that the firm itself has not been fined.
The agency announced on December 3 that it accused them of misleading investors while raising about $170 million for Shima Capital Fund I.
The SEC’s complaint, filed in the Northern District of California, claims that between 2021 and 2023, Gao exaggerated his past investment results to attract investors.
He allegedly told potential backers that one of his investments produced a 90-times return, when it actually returned around 2.8 times.
The SEC also said Gao raised about $11.9 million through a special purpose vehicle linked to BitClout tokens. He told investors they would benefit from discounted token prices, but according to the agency, he sold the tokens to the vehicle at higher prices and kept roughly $1.9 million in profit without disclosure.
Meanwhile, ChronoForge, a Web3 gaming studio, will discontinue operations by December 30. What happened? Read the full story.
