Bitwise Hit With Fraud Lawsuit Over Crypto Fund’s Conversion (1)

Bitwise Asset Management Inc. defrauded a group of cryptocurrency investors into converting its flagship product to a publicly traded trust and keeping their money with the volatile new fund, a lawsuit filed in Manhattan says.

The investors sued Bitwise and its top executives for fraud Monday, saying the fund managers tricked them into consenting to the conversion and reinvesting in an underperforming trust, the Bitwise 10 Crypto Index Fund, that charged unusually high fees.

Bitwise—which manages around $3 billion in assets—is allegedly backed by high-profile finance titans including billionaires Daniel Loeb, Daniel Och, Stanley Druckenmiller, and Henry ...