Breaking: Bitwise Faces Multi-Million Dollar Lawsuit Alleging Fraud, Negligence, and ‘Pump and Dump’ Scheme
Bitwise Asset Management is facing a lawsuit from the Mukamal family. The July 8 lawsuit accuses Bitwise’s top executives of fraud, negligence, and executing a “pump and dump” scheme that resulted in significant financial losses for investors.
The complaint, filed in the New York Supreme Court, highlights Bitwise’s alleged fraudulent actions and mismanagement practices, which have cast a shadow on the company’s trustworthiness and impacted thousands of investors.
The Mukamal family, powerful early investors in Bitwise, allege that the company’s top executives—CEO Hunter Horsley, President Teddy Fusaro, and CIO Matt Hougan—engaged in a “pump and dump” scheme and misled investors, resulting in over $2 million in damages.
“Bitwise CEO Hunter Horsley and executives Teddy Fusaro and Matt Hougan lied to the Mukamal family and committed securities fraud for which we are seeking over $2 million in damages,” stated Theodore Mukamal, a son of the Mukamal family during his conversation with Crytponews.
According to the lawsuit, the timeline of events begins in March 2018, when the Mukamal family invested $1.3 million in the Bitwise HOLD 10 Private Index Fund.
In April 2020, Bitwise allegedly altered the investment terms, breaking agreements and converting the fund to an OTC product against investor wishes.
“They executed a reckless and negligent pump and dump scheme for their own personal benefit, leaving their flagship product, the Bitwise 10 Crypto Index Fund (BITW), trading 35-65% below NAV for the past three years, which is devastating to thousands of investors,” Theodore Mukamal stated.
By November 2020, Bitwise initiated a campaign to liquidate shares, encouraging investors to sell at a premium to NAV, which led to losses.
The
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