Bitwise Asset Management Distances Itself From Fraud Case Facing Bitwise Industries Founders
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Bitwise Asset Management has said it is not associated with the fraud charges against the former CEOs of a defunct startup known as Bitwise Industries Inc.
The former CEOs of Bitwise Industries are facing fraud charges from the US Securities and Exchange Commission (SEC). The charges accuse them of misleading investors about the company’s finances.
Bitwise Asset Management has now come forward to distance itself from these charges. In a statement, the company stressed that the two companies were not affiliated despite bearing a similar name.
“San Francisco-based Bitwise Asset Management, Inc., the largest crypto index fund manager in America, has no relationship with, and has never had a relationship with, the now-defunct Bitwise Industries, a former technology company based in Fresno, California,” a press release said.
Bitwise Asset Management is among the largest crypto asset managers globally. In 2022, this company opened an active fund to attract institutional investors. Bitwise is also among the US-based companies that have made an application with the SEC for a spot Bitcoin ETF.
Bitwise Industries’ Founders Face SEC Charges
On Thursday, US authorities imposed a $100 million fraud charge against the founders of Bitwise Industries. Federal prosecutors and the SEC accuse Irma Olguin Jr and Jake Soberal of conspiracy to commit wire fraud and take millions of dollars from individuals and businesses.
The fraudulent scheme at the company came to light in May, resulting in hundreds of employees losing their jobs. The company later filed for bankruptcy protection in June.
The regulators state that Soberal and Olguin falsified documents and misrepresented crucial financial information about the company. They failed to disclose accurate records about the firm’s financial position. In 2022, Bitwise Industries raised $70 million in a funding round.
The regional director of the SEC’s San Francisco Regional Office, Monique C. Winkler, said that Soberal and Olguin committed blatant fraud. They create fake financial documents to deceive investors and raise money for the company.
“In one instance, the defendants allegedly conspired to send a purported screenshot to investors of a company bank account showing a cash balance of $23.4 million. In actuality, the account had only $325,100 in it. That’s not a bank error – that’s fraud, and the SEC is taking action to hold the defendants accountable,” SEC regional director Winkler said.
