$20 million settlement approved for former Bitwise employees

FRESNO, Calif. (KFSN) -- A judge has approved the settlement of a $20 million class action lawsuit brought by former Bitwise employees.

Lawyers representing the nearly 900 Bitwise employees who were laid off reached the settlement agreement with the company's investors, insurance companies, and debtors in July, just two weeks after co-founders Irma Olguin Junior and Jake Soberal pleaded guilty to the company's $115 million fraud scheme.

Federal prosecutors say Olguin and Soberal worked together to defraud investors and lenders.

The scheme continued until May 2023, when Bitwise ran out of money and the company collapsed. Olguin and Soberal are scheduled to be sentenced on Dec. 17.

Under the terms of the settlement, $6 million will be set aside to compensate employees for their actual losses.

The remaining funds will be used to reimburse lawyers for their expenses as well as the cost of the administration the claims.

Any money that remains will be distributed to employees based on their prior wages.

After getting clarification from the lawyers representing the employees, we've updated the story to reflect how the money will be distributed.