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 facet — 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 govt or board member at his employer, in line with the US Justice Division.
He moved the funds right into a platform known as HighTower Treasury, which he managed, and used the cash to pour into high-yield DeFi lending protocols promising annual returns of 20% or extra.
Within the first month, he cleared $133,000. Then the Terra ecosystem collapsed, and the broader crypto market adopted it down.
By Might 13, 2022, the worth of these investments had fallen to just about zero. With $35 million basically worn out, Shetty approached two fellow executives and advised them what he had executed. He was fired the identical day.
The case sat in federal court docket for years. Shetty was indicted on wire fraud expenses in Might 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 jail time period. Shetty was additionally ordered to repay the stolen funds in full and serve three years of supervised launch after finishing his sentence.
As of right this moment, the market cap of cryptocurrencies stood at $2.3 trillion. Chart: TradingView
How The Market Timing Made It Worse
The timing of the transfers put Shetty on the middle of considered one of crypto’s most chaotic intervals. The collapse of TerraUSD and its sister token Luna in Might 2022 triggered a broad market selloff that worn out billions of {dollars} in worth throughout the business.
Reviews point out Shetty’s DeFi positions had been caught in that wave, with losses accelerating quick sufficient that the funding worth reached close to zero earlier than any restoration was attainable.
The Justice Division mentioned the disclosure of the transfers got here solely due to the market downturn — implying that, had situations held, the scheme may need gone undetected longer.
The place The SBF Attraction Stands
Shetty’s case unfolded within the shadow of a far bigger crypto fraud. Former FTX chief govt 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 Courtroom of Appeals for the Second Circuit had not issued a call following arguments heard in November, in line with studies.
The 2 circumstances are unrelated, however each replicate federal prosecutors’ continued push to convey legal expenses over crypto-related monetary misconduct.
Shetty’s two-year sentence stands as one of many newer outcomes in that effort, masking conduct that came about greater than three years in the past.
Featured picture from Aggressive Austin, TX Prison Protection Legal professional, chart from TradingView
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