According to Fortune, an investigation found that Shima Capital founder Yida Gao created a secret offshore entity and transferred assets belonging to his venture capital company to a company registered in his own name without the knowledge of other investors in the company. Attorney Eric Hess said this was a complete violation of the behavior allowed by the Investment Advisory Act.
Yida Gao has not been charged with any crime, and a representative for Shima Capital said the firm does not comment on "such regulatory matters." But according to an anonymous source, Yida Gao's poor performance and behavior clearly violated the U.S. Securities and Exchange Commission's (SEC) investor protection rules, making it difficult to raise further funds. Despite the booming crypto market, a representative for Shima Capital revealed that the company is not currently raising funds.
Shima Capital has also experienced a wave of departures from senior staff in recent months, including Chief Technology Officer Carl Hua, Head of Research Alexander Lin, who left earlier this year to start his own venture capital firm, and Chief Operating Officer and Head of Platform Hazel Chen. The departing executives did not respond to requests for comment. Meanwhile, despite the current bull run in the cryptocurrency market, Shima Capital appears to be struggling. Its latest SEC filing shows that it has approximately $158 million in assets under management - a figure lower than the $200 million raised in 2022.
