FRESNO, Calif. (KSEE/KGPE) – Fresno City Council voted 6-0 to terminate the agreement between the City and Bitwise Industries Thursday.

Back in October 2022, the City of Fresno awarded Bitwise with a $1 million grant of American Rescue Plan funds to help grow and support thousands of small businesses.

Councilmembers said on Thursday that the resolution is an essential move to recover some of that federal grant money.

“We have ended our business relationship with Bitwise. We have rolled back the half-a-million dollars in ARPA funding,” said Mike Karbassi, Fresno City Councilmember. “Hopefully we’ll get that out there soon to invest in downtown, to help you know, foster small business and developmental growth, and get back on track.”

With Thursday’s unanimous decision to authorize a notice of termination to Bitwise, the City of Fresno will no longer conduct any business with the tech incubator or its various affiliates.

However, there is a line in the resolution saying, “…until such a time as the current financial situation is resolved.”

“No one has a crystal ball. Too, too difficult to say. But at this point, the way, the way things look, it looks like it would appear as if we’re not the only organization or entity taking this kind of action,” said Nelson Esparza, Fresno City Councilmember, when answering the possibility of the City of Fresno doing business with Bitwise in the future.

Esparza introduced the resolution with councilmembers Karbassi and Miguel Arias, and was referring to multiple lawsuits, including a class-action lawsuit by several furloughed Bitwise employees for violating the WARN Act, allegations of stealing 401k contributions, and bounced final checks.

“We need to work with them if they want to come back. But I don’t think it’s gonna happen. It just doesn’t seem likely. And they owe their employees a tremendous amount of money. Every day it’s accumulating. So, the first thing I want Bitwise to do is to get their employee’s checks cleared and paid,” said Karbassi.

Last Friday, Bitwise fired co-CEOs Jake Doberal and Irma Olguin and appointed board member Ollen Douglass as interim president of the company.

Karbassi says he tried to get in touch with Douglass to talk about what’s next.

“I’ve reached out to him. Crickets. Just like reaching out to Jake and Irma. I really hope he does reach out to us because we need information,” he said.

Karbassi says Fresno could look into recovering some of the grant money already given, but they are waiting until mid-July for Bitwise’s accounting report to come back.

“I suspect they’re gonna say they spent it all and did all this work, but we’re gonna find out. And I’m gonna tell you, there will be scrutiny because the trust with Bitwise has been broken,” said Karbassi.