The Mukamal family filed a lawsuit on Monday, July 8th, against asset manager Bitwise. The family seeks $2 million in damages. The lawsuit implicates Bitwise executives CEO Hunter Horsley, CIO Matt Hougan, and President Teddy Fusaro in alleged fraud, breach of contract, negligence, and pump-and-dump scheme that resulted in heavy financial losses for investors.

Also read: Hamster Kombat gains another important milestone in 3 months 

Theodore Mukamal, a member of the Mukamal family, said the executives lied to investors and violated security laws. Theodore alleged that Bitwise carried out a pump-and-dump scheme that only benefitted its executives. Mukamal stated that the accused’s actions led to Bitwise 10 Crypto Index Fund (BITW) trading between 35 and 60% below the net asset value (NAV) for three years, causing mayhem and frustration to investors.

Bitwise allegedly changed investment terms

The lawsuit filed in the New York Supreme Court highlighted that the Mukamal family invested $1.3 million in the private index fund BITW. In April 2020, the asset management firm allegedly changed investment terms, violated agreements, and converted the fund to an OTC product without consulting investors. In November, the asset manager encouraged investors to sell their shares at a loss. 

Also read: Rogue Company deletes all Dr Disrespect in-game content 

The family liquidated their shares in March 2021 and turned a profit. However, the family alleges that new misleading assurances and misrepresented terms from Bitwise executives led to another investment of $4.85 million. The family liquidated these newly acquired shares in March and April 2024, amounting to a net loss of $1.9 million.

The lawsuit also accuses Bitwise of several faults, including negligence, conspiracy to commit fraud, violation of fiduciary duty, and violation of the Securities Exchange Act of 1934. The family demands compensation for the losses realized and legal fees, among other expenses that will be settled in court. 

Influential billionaires not mentioned in the lawsuit

The accusations raise questions about Bitwise’s operations and whether the executives can be trusted. The lawsuit involves the firm’s senior management team. However, influential investors supporting Bitewise, such as Daniel Loeb and Stanley Druckenmiller, have not been mentioned in the court filings. An article published in February criticized Bitwise’s operations. The article referenced the high management fees of 2.5% and a lack of investment purpose.

Lawsuits are a common occurrence in the crypto sector, most of which are initiated by the U.S. Securities and Exchange Commission (SEC). The SEC has cracked down on major centralized exchanges such as Coinbase and Binance. On May 6th, Robinhood warned of an imminent lawsuit from the financial watchdog. Robinhood claimed that the commission sent its crypto unit a Wells notice that could potentially lead to a lawsuit.

Cryptopolitan reporting by Collins J. Okoth

Earn more PRC tokens by sharing this post. Copy and paste the URL below and share to friends, when they click and visit Parrot Coin website you earn: https://parrotcoin.net0

PRC Comment Policy

Your comments MUST BE constructive with vivid and clear suggestion relating to the post.

Your comments MUST NOT be less than 5 words.

Do NOT in any way copy/duplicate or transmit another members comment and paste to earn. Members who indulge themselves copying and duplicating comments, their earnings would be wiped out totally as a warning and Account deactivated if the user continue the act.

Parrot Coin does not pay for exclamatory comments Such as hahaha, nice one, wow, congrats, lmao, lol, etc are strictly forbidden and disallowed. Kindly adhere to this rule.

Constructive REPLY to comments is allowed