Insider: Cryptocurrency venture capital firm Shima Capital is quietly winding down operations

TechFlow news, December 17 — According to insider Kate Irwin, cryptocurrency venture firm Shima Capital is quietly winding down its operations. Three weeks ago, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the company and its founder Yida Gao, accusing them of "participating in a fraud scheme" to deceive investors. An email sent to founders of portfolio companies indicates that Gao is stepping down and shutting down the fund, stating: "I deeply regret my wrong decisions and apologize for letting everyone down."

Founded in 2021 with $200 million in funding, Shima Capital had invested in multiple crypto projects including Berachain, Monad, and Pudgy Penguins. The SEC alleges that Gao exaggerated investment returns in promotional materials, claiming a 90x return on one investment when the actual return was only 2.8x. Additionally, Fortune magazine reported that Gao transferred investment funds to an offshore entity he fully owned without disclosing it to investors.

The day after the SEC filed the lawsuit, Gao agreed to pay approximately $4 million in settlement penalties.