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Screenshots of an internal email outlining plans to wind down Shima Capital have surfaced online, days after the US Securities and Exchange Commission sued the crypto venture firm and its founder over allegations of investor fraud.
On Nov. 25, the SEC charged Shima Capital Management LLC and its founder, Yida Gao, with making false and misleading statements while raising almost $170 million from investors, the agency <a href="https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26430" rel="noopener noreferrer nofollow">announced</a> on Dec. 3.
The complaint, filed in the US District Court for the Northern District of California, alleged that Gao inflated his investment track record in marketing materials used to raise capital for Shima Capital Fund I between 2021 and 2023.
According to the SEC, Gao claimed one prior investment had delivered a 90x return, when the actual return was closer to 2.8x. The regulator also alleged that when discrepancies in the pitch deck were about to be reported publicly, Gao told investors the issues were the result of clerical errors.
<h2 id="sec-alleges-1-9-million-undisclosed-gain">SEC alleges $1.9 million undisclosed gain</h2>
Separately, the SEC claimed that Gao raised about $11.9 million through a special purpose vehicle tied to BitClout tokens, telling investors that they would be protected by discounted token purchases. While Gao did acquire tokens at a discount, the SEC said he sold them to the SPV at a higher price without disclosing that he personally retained about $1.9 million in profits.
Related: <a href="https://cointelegraph.com/news/crypto-fundraising-record-btc-peak-market-crash" rel="noopener noreferrer nofollow">Crypto fundraising sets new record of $3.5B in a single week</a>
In a Wednesday <a href="https://x.com/kateirwin/status/2001065025977667613" rel="noopener noreferrer nofollow">post</a> on X, crypto journalist Kate Irwin shared screenshots of an email allegedly sent by Gao to portfolio founders. In the screenshots, Gao purportedly said he would step down as managing director of Shima Capital and that the fund would undergo an “orderly wind-down.”
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 <img alt="SEC lawsuit puts Shima Capital’s future in question as wind-down message surfaces" src="https://s3.cointelegraph.com/uploads/2025-12/019b2b46-10d7-793b-be83-6b244d7b4c7f.jfif" title="">
 <figcaption>
 Gao’s alleged email to portfolio companies. Source: <a href="https://x.com/kateirwin/status/2001065025977667613" rel="noopener noreferrer nofollow">Kate Irwin</a>
 </figcaption>
</figure>
The screenshots purportedly show Gao stating that the SEC and Department of Justice actions are related to his personal conduct, not that of Shima Capital’s portfolio companies, and claiming that no fines have been imposed on the company.
The screenshots also show that independent advisers from FTI Consulting and FTI Capital Management would oversee the wind-down process and monetization of investments, while Shima’s finance team would remain in place. Gao allegedly said he would remain involved with portfolio support “as permitted,” but without management control.
Cointelegraph could not independently verify the email. We reached out to Shima Capital and some of the fund’s portfolio companies for confirmation, but had not received responses at the time of publication.
Related: <a href="https://cointelegraph.com/learn/articles/fundraising-using-cryptocurrencies" rel="noopener noreferrer nofollow">A beginners guide on raising funds using cryptocurrencies</a>
<h2 id="shima-capital-launched-with-200-million-debut-fund">Shima Capital launched with $200 million debut fund</h2>
In 2022, Shima Capital <a href="https://www.prnewswire.com/news-releases/shima-capital-debuts-with-200-million-to-support-web3-founders-through-crypto-bear-market-301607694.html" rel="noopener noreferrer nofollow">announced</a> the launch of its first venture fund, Shima Capital Fund I, raising $200 million to back early-stage blockchain startups. Founded in 2021 by Gao, the firm said the fund received backing from a range of prominent investors, including Dragonfly Capital, Animoca Brands, OKX Blockdream Capital, Republic and Andrew Yang.
Shima Capital has <a href="https://shima.capital/investments/" rel="noopener noreferrer nofollow">invested</a> in numerous crypto projects, including <a href="https://cointelegraph.com/news/humanity-protocol-unicorn-status-30m-raise" rel="noopener noreferrer nofollow">Humanity Protocol</a>, Berachain, Monad, Pudgy Penguins, <a href="https://cointelegraph.com/news/shiba-inu-memecoin-raises-12-million-institutional-investors" rel="noopener noreferrer nofollow">Shiba Inu</a> and many others.
Magazine:<a href="https://cointelegraph.com/magazine/2026-pragmatic-privacy-crypto-canton-zcash-ethereum-foundation/" rel="noopener noreferrer nofollow"> 2026 is the year of pragmatic privacy in crypto — Canton, Zcash and more</a>

SEC lawsuit puts Shima Capital’s future in question as wind-down message surfaces

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