Leaked memo shows popular crypto firm may wind down

Core Insights - Scrutiny around Shima Capital intensified following fraud charges against its founder Yida Gao by US regulators, indicating potential operational changes and a possible wind-down of the firm [1][2] Regulatory Actions - The US Securities and Exchange Commission (SEC) charged Shima Capital Management LLC and Yida Gao on November 25, alleging investor fraud related to fundraising for the firm's debut crypto venture fund [2] - The SEC claims that between 2021 and 2023, Gao and Shima Capital raised nearly $170 million from investors using misleading marketing materials regarding Gao's past investment performance [3] Internal Developments - Internal communications suggest that Gao plans to step down as managing director and pursue an "orderly wind-down" of the firm, with independent advisers overseeing the process [4][5] - Gao indicated that the SEC and Department of Justice actions pertain to his personal conduct rather than the firm's portfolio companies [4] Allegations of Misrepresentation - The SEC's complaint outlines two main allegations, including that Shima Capital's pitch deck exaggerated Gao's previous investment results, claiming a 90x return on one investment when the actual return was closer to 2.8x [6] - Gao reportedly dismissed discrepancies as clerical errors when questioned by investors [6]