Hard Money Lending Gone Wrong in the Bitwise Collapse

June 6, 2025

Bob Coleman
Founder & Publisher

Fraud Friday: Hard Money Lending Gone Wrong in the Bitwise Collapse

This week on Fraud Friday, we’re diving into the case of Andrew Adler, a hard money lender whose actions contributed to the financial downfall of Fresno-based startup Bitwise Industries. Adler was recently sentenced to three years and five months in prison for defrauding investors in loans tied to the failed business. 

Before it was defrauded, Bitwise Industries operated as a tech incubator and workforce development company focused on revitalizing underserved communities through technology training, software development, and real estate redevelopment.

Bitwise filed for Chapter 7 bankruptcy on June 28, 2023, initiating the liquidation of its assets. At the time of filing, the company reported over $252 million in liabilities and only about $175 million in assets.

From December 2022 to May 2023, Adler and his business partner, David Hardcastle, granted Bitwise approximately $20 million in loans. However, these loans weren’t funded with their own money. Instead, they syndicated the loans to other investors, forging crucial documents and altering contracts in the process. Adler and Hardcastle fabricated lower interest rates and even forged the signature of Bitwise Co-CEO Jake Soberal on loan documents, making the investment appear less risky and more appealing to their network of investors.

The deception didn’t stop there. Adler and Hardcastle misused a secure interest reserve—about $714,000 of investor funds—on a personal investment in another company under their control. These funds, meant to safeguard investors in case of borrower defaults, were improperly siphoned off for personal gain.

While the fraudulent loans provided Adler and Hardcastle tens of thousands in fees, their plans for larger profits unraveled when Bitwise collapsed, exposing the broader Ponzi-like scheme run by its CEOs, Jake Soberal and Irma Olguin Jr. The startup’s failure cost investors over $115 million and left Adler facing legal repercussions.