Former Startup CFO Sentenced to Two Years for $35M Crypto Fraud

A federal judge in Seattle has sentenced former startup chief financial officer Nevin Shetty to two years in prison after he was convicted of wire fraud tied to unauthorized cryptocurrency investments.

According to the U.S. Department of Justice, Shetty secretly transferred approximately $35 million from a Seattle-based technology startup into a cryptocurrency platform he controlled called HighTower Treasury. The transfers took place in 2022 without the knowledge of company executives or board members.

Funds Used in High-Yield DeFi Lending Protocols

Investigators said the funds were used to invest in high-yield decentralized finance lending protocols that claimed returns of 20% or more. During the first month of trading, the investments reportedly generated about $133,000 in profit.

However, the strategy quickly unraveled following the collapse of the Terra ecosystem, which triggered a broader downturn across digital asset markets. By mid-May 2022, the value of the investments had fallen close to zero.After the losses became clear, Shetty informed two executives about the unauthorized transfers and was immediately dismissed from the company.

Conviction and Sentencing Details

Shetty was indicted in May 2023 and later found guilty on four counts of wire fraud in November 2025 after a nine-day jury trial. In addition to the two-year prison sentence, the court ordered him to repay the stolen funds and serve three years of supervised release following his imprisonment.

The incident occurred months before the collapse of FTX, which led to the conviction of its former chief executive Sam Bankman-Fried. Bankman-Fried was sentenced to 25 years in prison in 2024 and has since filed an appeal while the case remains under review.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.