US authorities charge tech startup Bitwise co-founders for $100-million fraud scheme

US authorities on Thursday charged the cofounders of private technology startup Bitwise Industries for their roles in a $100 million fraud scheme, according to federal prosecutors and the Securities and Exchange Commission.

Irma Olguin Jr and Jake Soberal surrendered to authorities on Thursday on charges they conspired to commit wire fraud and took millions of dollars from various businesses and individuals, the US attorney for the Eastern District of California said in a statement. Bitwise filed for bankruptcy protection in June.

"Jake and Irma have taken full responsibility for the mistakes they made while trying to preserve Bitwise. Their sincere desire not to see Bitwise fail caused them to make numerous grave and consequential errors in judgment," lawyers for Soberal and Olguin said in a statement.


Hundreds of Bitwise employees lost their jobs in May 2023 when the scheme was exposed, according to the US Securities and Exchange Commission, which filed civil charges against the co-CEOs on Thursday in federal court in California.

Soberal and Olguin misrepresented key information and falsified documents concerning the firm's financial state while raising about $70 million from investors in 2022, regulators said. Both have agreed to a bar preventing them from serving as officers or directors of public companies, as well as other penalties, the SEC said.

If convicted, the two face a maximum penalty of 20 years in prison and a $250,000 fine.