The SEC’s complaint alleges that Soberal and Olguin made material misrepresentations and falsified documents concerning Bitwise’s cash position and historical financial performance while raising approximately USD70 million from investors in 2022.
According to the complaint, Soberal and Olguin created and provided investors with falsified bank records and a fake audit report that showed, respectively, inflated cash balances and higher revenues than Bitwise actually generated.
Soberal and Olguin’s alleged misrepresentations and falsified materials painted Bitwise as a healthy, growing business with favourable financial performance. In reality, and as Soberal and Olguin allegedly knew, Bitwise faced constant cash shortages and was often on the brink of failure because it was unable to generate sufficient funds from its operations.
Soberal and Olguin’s scheme came to light in May 2023 when Bitwise failed to pay its staff and abruptly sent home —and then terminated—all of its hundreds of personnel.
Monique C. Winkler, Regional Director of the SEC’s San Francisco Regional Office said “In one instance, the defendants allegedly conspired to send a purported screenshot to investors of a company bank account showing a cash balance of USD23.4 million. In actuality, the account had only USD325,100 in it. That’s not a bank error—that’s fraud."
Soberal and Olguin have each agreed to the entry of a partial judgment, subject to court approval, imposing permanent and conduct-based injunctions as well as an officer and director bar and reserving the issues of surrender of gains, prejudgment interest and a civil penalty for further determination by the court.
In addition to the SEC's civil action, the Department of Justice has prosecuted Soberal and Olguin.