CEOs of crashed tech upstart Bitwise accused of swindling $100M from investors The co-founders and co-CEOs of failed startup Bitwise appeared in a California court Thursday accused of cheating investors out of $100 million by making up bank statements and revenue figures. Irma Olguin, Jr and Jake Soberal self-surrendered after a federal complaint charged them with conspiring to commit wire fraud by …
They never, ever do, do they?? Every single one is 'special', they believe they get to do whatever they want to do and nobody will ever be the wiser, or care.
But keep an eye out on this case: it'll be a relative slap on the wrist. The fraud they are declaring is paperwork - falsifying documents.
"According to the financial watchdog, Olguin and Soberal have agreed to resolve the SEC's charges against them; that will likely involve them being fined and facing other forms of punishment, to be determined later by the courts.
And there you go: slap on the wrist already being planned. Never you mind the investors that lost $100 million, never you mind the $600K per year pocketed personally. The only complaint is that they filled out the SEC forms 'improperly', and grandma still loses her life savings.
"If convicted, the two face a maximum penalty of 20 years in prison and a $250,000 fine."
They'll never get even close to that. Maybe 2 years, several months of public service - it was all a misunderstanding! Our underlings did all the dirty! We didn't know nothin'!
I was expecting another crypto scam. Or was that part of it, one of those "we're going to do all this traditional IT stuff but with blockchain / bitcoin" as a way to rope in more suckers, given the timeframe when it was founded was right when the crypto hype bubble was really inflating?
I would suspect that some early stage investors simply saw "tech sector startup" and "bitsomething", and threw other people's money at it, expecting a magic beanstalk to grow.
The article should clarify that there is indeed a separate business using the Bitwise name with no relationship to the company that's gone bust, Bitwise Industries. That other outfit Bitwise Asset Managements is the sort of thing you might expect from the name, a "crypto fund manager", and you can form your own opinions on them.
I wonder if Bitwise Industries had funding from Softbank?
>"most of the money went toward buying out some of the company's early investors and … there was only a few million in series-A funds left over."<
So early investors were aware the business model failed and kept quiet to get their money back?
If i were into conspiracy theories i'd ask what they threatened the co-CEO's with to get them to put their neck on the line to raise enough fraudulent money to buy out the series-A investors.
Warren Buffet's Rule 8: Invest in What You Understand.
Get someone to quiz you so as to distinguish between what you actually understand as against think you understand. Just about everyone involved in the crypto mania believed they belong in the former but recent history rather suggests the latter.
This pair apprear to have used Bernie Madoff's "Dummy's Guide to Your Ponzi Scheme" as their playbook without reading the final act.
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