CFO Sentenced to Prison After Losing $35 Million in Company Funds Through Crypto Scheme

Washington Man Sentenced for Diverting $35 Million to Crypto Platform

A resident of Washington has received a two-year prison term after redirecting $35 million from his previous employer into his own DeFi venture, resulting in the near-total loss of the funds.

Nevin Shetty, aged 42, was convicted of wire fraud last November for misappropriating money from the private software company where he served as CFO.

After being informed in April 2022 that his position would be terminated due to performance concerns, Shetty—who had previously created a “conservative” investment policy for the company—secretly transferred $35 million to his own business, HighTower Treasury. He then invested these funds in high-yield DeFi lending platforms, some of which advertised returns of 20% or more.

According to the Department of Justice, Shetty’s plan was to pay his employer a modest, fixed sum while retaining the bulk of any profits for HighTower. The scheme initially generated about $133,000 in its first month for Shetty and his business partner.

However, the plan unraveled in May 2022 after the collapse of Terra and the onset of a crypto market downturn, which caused the value of HighTower’s crypto holdings to plummet from $35 million to almost nothing.

Shetty eventually admitted his actions to colleagues and was dismissed. The company, according to Judge Tana Lin, endured “significant and severe effects” from the theft, with the judge noting that Shetty’s conduct nearly drove the business to closure.

Although prosecutors sought a nine-year sentence, arguing for a harsh penalty due to the “web of lies” and the damage inflicted—including the layoff of 60 employees—the court imposed a two-year prison term.

Shetty has also been ordered to pay $35,000,100 in restitution and will be subject to three years of supervised release following his incarceration. Judge Lin further prohibited him from holding officer or director roles in any company without prior approval from his probation officer.