The Securities and Exchange Commission (SEC) has filed a lawsuit against Yida Gao and Shima Capital Management LLC.

The complaint, seen by FX News Group, was submitted at the California Northern District Court on November 25, 2025.

Gao, age 35, resides in Marietta, Georgia. Gao is the founder, owner, and Managing Director of registered investment adviser Shima Capital. Gao is a venture capitalist, investor, and registered investment adviser who has managed multiple venture funds. He focuses primarily on the crypto and emerging technology space, and has garnered significant accolades, raised funds from well-known investors, and obtained a high-profile teaching position.

The SEC’s complaint alleges that while Gao was achieving success as a venture capitalist, he also was making material misrepresentations to, and engaged in a scheme to defraud, certain investors.

Specifically, according to the complaint, beginning in approximately May 2021 through March 2023, Gao raised significant sums by offering and selling membership interests in a crypto-asset-focused venture fund that he called “Shima Capital Fund I,” using a “pitch deck” (marketing materials) that contained material misrepresentations concerning Gao’s investment track record.

Gao formed an entity, Shima Capital Management LLC, to manage investments in Shima Capital Fund I, and registered it with the Commission as an investment adviser.

Gao used the misleading pitch deck to raise more than $158 million from 349 investors in Shima Capital Fund I, falsely claiming, among other things, that one of his prior investments had generated a 90 times return.

In February 2023, a prominent news publication published an article regarding an apparent discrepancy in the Shima Capital Fund I pitch deck. When Gao became aware that the article was about to be published, he called several of his most significant investors and falsely represented to them that the discrepancies arose from mere clerical errors.

Separately, as part of a different investment that Gao pitched in the spring of 2021, he misled other investors by telling them that he would be purchasing assets for the proposed investment vehicle at a significant discount, but then failed to pass on the full benefit of the discount to the investors, instead keeping a significant portion as profit.

Specifically, in April 2021, Gao offered and sold membership interests in a special purpose vehicle he formed (the “BitClout SPV”) for the purported purpose of making investments in BitClout, a blockchain social network for which BitClout tokens were the native crypto asset.

Gao created a marketing memorandum for the BitClout SPV that claimed that he could negotiate a 20–40% discount to purchase BitClout tokens for the BitClout SPV, due to his unique access to purchase directly from early BitClout investors. Gao assured the investors he solicited to purchase membership interests in the BitClout SPV that this substantial discount would protect their investment even if the price of the BitClout tokens later dropped significantly. Gao used the memorandum to solicit approximately $11.9 million from two individuals and three entities. But this memorandum was false and misleading: while Gao did obtain the BitClout tokens at a substantial discount, he did not sell them to the BitClout SPV at that price.

Instead, beginning in May 2021, in a series of transactions, Gao purchased BitClout tokens at a discounted price and thensold them to the BitClout SPV for a higher price, securing $1.9 million in profit for himself that he failed to disclose.

Thus, at the same time that he was holding himself out as a respected and successful investor in crypto and emerging technologies, Gao was making false and misleading statements and engaged in two different schemes to defraud his investors and prospective investors.

The SEC accuses the defendants of violations of Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]; Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; and Section 206(4) of the Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8)].

The Commission seeks a final judgment:

1. permanently enjoining Defendants from engaging in the acts, practices, transactions, and courses of business alleged herein by committing or engaging in specified actions or activities relevant to such violations;
2. ordering Defendant Gao to disgorge their ill-gotten gains and to pay prejudgment interest thereon pursuant to Section 21(d)(5) and (7) of the Exchange Act [15 U.S.C. §§ 78u(d)(5) and (7)];
3. imposing civil money penalties on Defendant Gao pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)], Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], and Section 209(e) of the Advisers Act [15 U.S. Code § 80b-9(e)];
4. imposing an officer and director bar on Defendant Gao pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2) of the Exchange Act[15 U.S.C. § 78u(d)(2)];
5. prohibiting Defendant Gao from participating, directly or indirectly, including, but not limited to, through any entity he controls, in any offering of securities, provided, however, that such injunction shall not prevent him from purchasing or selling securities for his personal account, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)]; and
6. ordering such other and further relief the Court may find appropriate.