Vandelay Industries has initiated legal proceedings against Bitwise Asset Management, seeking damages amounting to $2 million. The allegations include accusations of financial impropriety, such as breach of fiduciary duty, carelessness, fraud, and violation of securities laws.
In 2018, the Mukamal family made a $1.3 million investment in the Bitwise HOLD 10 Private Index Fund. In 2020, this fund became openly traded on OTC marketplaces and subsequently raised its management fees by 25%.
The plaintiffs contend that these modifications were imposed upon them amidst the COVID-19 recession, depriving them of any genuine alternatives. The lawsuit alleges that Bitwise made false representations regarding its investments in 2021, resulting in a financial loss of around $1.93 million.
Bitwise, with a valuation of $500 million in 2021 and assets under management of $3 billion, has received support from prominent investors such as Daniel Loeb and Stanley Druckenmiller.
Bitwise persists in its market operations, overseeing the Bitwise Bitcoin Fund (BITB) and revising applications for a spot Ethereum ETF, despite facing legal difficulties.
