Only after losing the money did Nevin Shetty, the former CFO of a Seattle tech startup, inform his colleagues. He has been sentenced to two years in federal prison for secretly transferring $35 million of company funds to a cryptocurrency platform he operated on the side, which then quickly vanished.
A Covert Scheme
In 2022, Shetty made the transfers without the knowledge of any company executives or board members, as revealed by the US Justice Department.
He funneled the funds into his platform, HighTower Treasury, and invested in high-yield DeFi lending protocols promising lucrative returns of over 20% annually.
Initially, he made $133,000, but when the Terra ecosystem collapsed, followed by a broader crypto market decline, the investments plummeted to near zero by May 13, 2022. It was then that Shetty disclosed his actions to two colleagues and was promptly terminated.
The legal proceedings took years, with Shetty being indicted on wire fraud charges in May 2023 and subsequently found guilty on four counts after a nine-day jury trial in November 2025.
During his sentencing, a Seattle judge imposed a two-year prison sentence on Shetty, along with a full restitution order and three years of supervised release post-incarceration.
As of the latest data, the cryptocurrency market cap has reached $2.3 trillion. Chart: TradingView
The Impact of Market Timing
Shetty’s actions coincided with a tumultuous period in the crypto sphere. The collapse of TerraUSD and Luna in May 2022 triggered a widespread market sell-off, erasing billions of dollars in industry value.
Reports suggest that Shetty’s DeFi positions were severely affected, with losses escalating rapidly, leading to the rapid devaluation of investments before any chance of recovery.
The Justice Department noted that the disclosure only came to light due to the market downturn, implying that, under stable conditions, the scheme might have remained undetected for longer.
Status of the SBF Appeal
Shetty’s case unfolded alongside a larger crypto fraud involving former FTX CEO Sam Bankman-Fried, who was sentenced to 25 years in prison in 2024.
Bankman-Fried has appealed his conviction, with the US Court of Appeals for the Second Circuit yet to issue a ruling following the November arguments.
Although unrelated, both cases underscore federal prosecutors’ crackdown on crypto-related financial misconduct.
Shetty’s two-year sentence reflects the ongoing efforts to prosecute such crimes, despite the time lag since the actual events occurred more than three years ago.
Image credit: Aggressive Austin, TX Criminal Defense Attorney, chart source: TradingView
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