Crypto Guru Falsified Returns, Pocketed $1.9M Profit!

SEC v. Yida Gao, Shima Capital Management LLC — U.S. Securities and Exchange Commission Litigation Release No. 26430, dated December 3, 2025.

The SEC charged Shima Capital Management LLC and its owner, Yida Gao, with fraud for making false and misleading statements to investors. They allegedly inflated Gao's investment track record and misrepresented discounts in crypto investments, leading to over $169.9 million in investor funds being raised under false pretenses. Gao has consented to a settlement including disgorgement and an officer-and-director bar, while Shima Capital has agreed to a settlement with undertakings.

In Plain English

Imagine someone selling you a special investment fund. They showed you a fancy slideshow claiming they made a lot of money on past investments, like turning $1 into $90. But they actually only turned $1 into $2.80. They also promised to buy a digital coin for your fund at a big discount, but they secretly bought it for themselves at a discount and then sold it to your fund at a higher price, keeping a large profit for themselves without telling you. The SEC stepped in because this was misleading and fraudulent.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Exaggerated Track Record From May 2021 through March 2023, Yida Gao and Shima Capital Management LLC raised over $158 million from 349 investors for their crypto-asset fund, Shima Capital Fund I. They used a marketing pitch deck that falsely claimed Gao's prior investments had generated a 90 times return, when in reality, he only earned a 2.8 times return.
2. Cover-up Attempt In February 2023, when a news publication was about to publish an article highlighting discrepancies in the pitch deck, Gao allegedly contacted several key investors. He falsely told them that the material misrepresentations were merely 'clerical errors' to downplay the inaccuracies.
3. BitClout SPV Offering In April and May 2021, Gao raised approximately $11.9 million from five investors by offering membership interests in a special purpose vehicle called the 'BitClout SPV.' This SPV was intended to invest in BitClout tokens.
4. Misleading Discount Claims For the BitClout SPV, Gao claimed he could purchase BitClout tokens at a 20-40% discount due to unique access to early investors. He assured investors that this substantial discount would protect their investments, even if the token price later dropped significantly.
5. Self-Dealing Profit While Gao did acquire BitClout tokens at a discount, he did not pass the full benefit to the BitClout SPV. Instead, he sold the tokens to the SPV for a higher price, pocketing $1.9 million in profit for himself without disclosing this conflict of interest to the investors.

The Enforcement Action

On November 25, 2025, the SEC filed fraud charges against Shima Capital Management LLC and its owner, Yida Gao. Gao consented to a bifurcated settlement permanently enjoining him from future violations, ordering disgorgement of $3,923,757.33 plus prejudgment interest of $304,622.67 (to be offset by restitution in a parallel criminal action), and a conduct-based injunction and officer-and-director bar. Shima Capital consented to a settlement permanently enjoining it from future violations and requiring compliance with certain undertakings. Both settlements are subject to court approval. A parallel criminal action was unsealed against Gao on the same date.

Named in this action: Yida Gao, Shima Capital Management LLC.

Original SEC litigation release ↗ · Browse all cases