{"id":83783,"date":"2024-07-10T05:11:01","date_gmt":"2024-07-10T09:11:01","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=83783"},"modified":"2024-07-10T05:11:04","modified_gmt":"2024-07-10T09:11:04","slug":"bitwise-investors-sue-over-alleged-pump-and-dump-scheme","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/bitwise-investors-sue-over-alleged-pump-and-dump-scheme\/","title":{"rendered":"Bitwise Investors Sue Over Alleged Pump and Dump Scheme"},"content":{"rendered":"\n

Bitwise, a key player in the crypto ETF boom<\/a>, faces a lawsuit accusing its leadership of self-serving and wrongful actions.<\/p>\n\n\n\n

\"Bitwise
Bitwise Investors Sue Over Alleged Pump and Dump Scheme<\/figcaption><\/figure>\n\n\n\n

Bitwise has been a significant beneficiary of the ongoing crypto ETF<\/a> growth, as it is one of only three asset managers to have listed a spot Bitcoin Exchange Traded Funds (ETFs) on the New York Stock Exchange.<\/p>\n\n\n\n

However, the firm's reputation is currently at risk due to a lawsuit that accuses the firm and its leadership of “egregious, self-serving, and wrongful actions,” despite an otherwise successful 2024.<\/p>\n\n\n\n

Companies controlled by the Mukamals, an affluent New York family that invested $1.3 million in the Bitwise HOLD 10 Private Index Fund, filed a complaint against Bitwise in a New York court on Monday, June 8.<\/p>\n\n\n\n

The allegations suggest that CEO Hunter Horsley and other Bitwise executives deceived investors by selling the fund as a private investment opportunity in 2018, only to convert it to an over-the-counter (OTC) trading model in 2020.<\/p>\n\n\n\n

\u201cUntil that point, the Fund had never disclosed its intention to trade via OTC; indeed, Plaintiffs chose to invest in the Fund based specifically upon the representation that their investment would be privately placed and privately redeemable,\u201d the lawsuit states.<\/p>\n\n\n\n

The Mukamals allege that Horsley coerced them into selling shares in the fund to provide liquidity shortly after they learned that HOLD 10 would be converted to OTC trading<\/a> under the new symbol, BITW.<\/p>\n\n\n\n

\u201cHorsley misled Theodore [Mukamal] by falsely asserting that BITW was still accepting private placements. He also failed to disclose that, despite the fact that Theodore's new investment would be privately placed, he would only be able to sell it through OTC,\u201d the complaint alleges.<\/p>\n\n\n\n

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Lawsuit Plagues Bitwise Over Misleading #Crypto\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> Trust Conversion

Sentiment: Negative

Bitwise Asset Management Inc. finds itself in hot water after a group of cryptocurrency investors has accused it of…

Brief: https:\/\/t.co\/zju72kUM6z<\/use><\/svg><\/span><\/a>https:\/\/t.co\/n1COYtefuK<\/use><\/svg><\/span><\/a><\/p>— Briefly Crypto (@BrieflyCrypto) July 9, 2024<\/use><\/svg><\/span><\/a><\/blockquote>

It also accuses him of deceiving investors by “failing to disclose the severe tax repercussions they would face if they implemented his recommendations.”<\/p>\n\n\n\n

It appears that Bitwise's decision to transition the fund to OTC trading was not by the preferences of certain investors. This raises the question: what was the benefit?<\/p>\n\n\n\n

The switch was a component of a “pump and dump” scheme, as alleged in the Mukamals' lawsuit. This scheme involved the initial capital provided by investors fraudulently inflating the price of shares in the fund above its net asset value (NAV)<\/use><\/svg><\/span><\/a>.<\/p>\n\n\n\n

The term “pump and dump” is typically associated with low-capitalization meme currencies and dubious celebrity endorsements in the cryptocurrency industry. However, the fundamental strategic approach has been implemented on various assets.<\/p>\n\n\n\n

Bitwise's CEO is accused by disgruntled investors of employing “aggressive and solely self-serving tactics” to induce them to sell and reinvest in the new fund.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Bitwise, a key player in the crypto ETF boom, faces a lawsuit accusing its leadership of self-serving and wrongful actions. Bitwise has been a significant beneficiary of the ongoing crypto ETF growth, as it is one of only three asset managers to have listed a spot Bitcoin Exchange Traded Funds (ETFs) on the New York […]<\/p>\n","protected":false},"author":36,"featured_media":83789,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[17080,367,20414],"class_list":["post-83783","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bitwise-2","tag-investors","tag-pump-and-dump-scheme"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2024\/07\/643015E9E71A983DFC1CC0C886462B72BCBB54A88B815285EDA4921E215D9611.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/83783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=83783"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/83783\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/83789"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=83783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=83783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=83783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}