$35M Diverted To Crypto: Ex-CFO Gets 2-Year Prison Term
He advised his colleagues solely after the cash was gone. Nevin Shetty, the previous chief monetary officer of a Seattle-based tech startup, was sentenced Thursday to 2 years in federal jail after secretly transferring $35 million in firm funds right into a cryptocurrency platform he ran on the aspect — then watching practically all of it disappear in a matter of months.
A Scheme That Ran In Secret
Shetty made the transfers in 2022 with out the information of a single government or board member at his employer, in response to the US Justice Department.
He moved the funds right into a platform referred to as HighTower Treasury, which he managed, and used the money to pour into high-yield DeFi lending protocols promising annual returns of 20% or extra.
In the primary month, he cleared $133,000. Then the Terra ecosystem collapsed, and the broader crypto market adopted it down.
By May 13, 2022, the worth of these investments had fallen to almost zero. With $35 million basically worn out, Shetty approached two fellow executives and advised them what he had achieved. He was fired the identical day.
The case sat in federal courtroom for years. Shetty was indicted on wire fraud costs in May 2023. A nine-day jury trial adopted in November 2025, ending with a responsible verdict on 4 counts.
At sentencing Thursday, a Seattle choose handed down the two-year prison term. Shetty was additionally ordered to repay the stolen funds in full and serve three years of supervised launch after finishing his sentence.
How The Market Timing Made It Worse
The timing of the transfers put Shetty on the middle of one in all crypto’s most chaotic durations. The collapse of TerraUSD and its sister token Luna in May 2022 triggered a broad market selloff that worn out billions of {dollars} in worth throughout the trade.
Reports point out Shetty’s DeFi positions have been caught in that wave, with losses accelerating quick sufficient that the funding worth reached close to zero earlier than any restoration was potential.
The Justice Department mentioned the disclosure of the transfers got here solely due to the market downturn — implying that, had circumstances held, the scheme may need gone undetected longer.
Where The SBF Appeal Stands
Shetty’s case unfolded within the shadow of a far bigger crypto fraud. Former FTX chief government Sam Bankman-Fried was convicted individually and sentenced to 25 years in jail in 2024.
Bankman-Fried has appealed that ruling. As of Friday, the US Court of Appeals for the Second Circuit had not issued a call following arguments heard in November, in response to studies.
The two circumstances are unrelated, however each mirror federal prosecutors’ continued push to carry prison costs over crypto-related monetary misconduct.
Shetty’s two-year sentence stands as one of many more moderen outcomes in that effort, protecting conduct that came about greater than three years in the past.
Featured picture from Aggressive Austin, TX Criminal Defense Attorney, chart from TradingView
