TechFlow reports, citing Fortune, that an investigation has found Yida Gao, founder of Shima Capital, created a secret offshore entity and transferred assets belonging to his venture capital firm into a company registered under his own name—without the knowledge of other investors in the firm. Attorney Eric Hess said this conduct is entirely contrary to what is permitted under the Investment Advisers Act.
Yida Gao has not been charged with any crime, and a representative of Shima Capital said the firm would not comment on "such regulatory matters." However, according to an anonymous source, Yida Gao's poor performance and actions clearly violate U.S. Securities and Exchange Commission (SEC) investor protection rules, leaving the firm struggling to raise further capital. Despite the booming crypto market, a Shima Capital representative revealed the firm is currently not fundraising.
In recent months, Shima Capital has also experienced a wave of high-level executive departures, including CTO Carl Hua, research head Alexander Lin—who left earlier this year to launch their own venture capital firm—and COO and platform lead Hazel Chen. The departing executives did not respond to requests for comment. Meanwhile, despite the current bullish cryptocurrency market, Shima Capital appears to be struggling. Its latest SEC filings show approximately $158 million in assets under management—less than the $200 million it raised in 2022.
