Shima Capital Initiates Liquidation After SEC Exposes 90x Return Lie
The $200M fund enters liquidation under FTI Consulting after the SEC charges founder Yida Gao with fabricating returns to raise capital.
Shima Capital, the $200 million venture firm backing heavyweights like Berachain and Monad, has entered an orderly wind-down following fraud charges against founder Yida Gao. The collapse marks a rare instance of the Securities and Exchange Commission (SEC) piercing the corporate veil of a top-tier crypto VC, signaling that private fund managers are no longer immune to the enforcement sweeps battering exchanges.
The Receipt: 90x vs 2.8x
According to the SEC complaint filed in the Northern District of California, Gao raised approximately $170 million from 349 investors by fabricating his track record. The discrepancy was not subtle.
Marketing materials for Shima Capital Fund I claimed a past investment generated a 90x return. The reality? A modest 2.8x. When press inquiries threatened to expose the inflation, Gao reportedly told investors the mismatch was a “clerical error.”
“Gao falsely told them that the discrepancies arose from mere clerical errors… while he was holding himself out as a respected and successful investor.” SEC Complaint
The BitClout Grift
Regulators uncovered a second scheme involving a Special Purpose Vehicle (SPV) tied to the decentralized social protocol BitClout. Gao raised $11.9 million from investors under the premise of securing tokens at a discount. While he did secure the discount, he sold the tokens to his own SPV at a markup, pocketing $1.9 million in undisclosed profit. The SPV’s investors eventually lost over 96% of their capital as the asset depreciated.
Immediate Impact
Gao has agreed to a bifurcated settlement, including a permanent injunction and $3.92 million in disgorgement plus interest. He will step down as Managing Director.
Control of the fund’s remaining assets now shifts to FTI Consulting, which will oversee the liquidation. This puts a significant supply overhang on illiquid token warrants and equity positions in Shima’s portfolio, which includes Pudgy Penguins, Berachain, and Monad. While these projects are capitalized independently, the forced exit of a major backer introduces cap table volatility that secondary market buyers will likely exploit.
