He told his colleagues only after the money ran out. Nevin Shetty, the former chief financial officer of a Seattle tech startup, was sentenced Thursday to two years in federal prison after he secretly transferred $35 million in company funds to a cryptocurrency platform he worked for — then watched nearly all of it disappear within months.
A plan that worked in secret
According to the US Department of Justice, Shetty made these transfers in 2022 without the knowledge of an executive officer or board member of the employer.
He transferred the funds to a platform he controlled called HighTower Treasury and used the money to pour into DeFi lending protocols that promise annual returns of 20% or more.
In the first month, he cleared $133,000. The Terra ecosystem then collapsed, and the broader crypto market followed suit.
By May 13, 2022, the value of this investment has dropped to almost zero. With $35 million essentially gone, Shetty turned to two fellow executives and told them what he had done. He was fired on the same day.
The case dragged on in federal court for years. Shetty was indicted in May 2023 on charges of wire fraud. A nine-day jury trial ended in November 2025 with a guilty verdict on four counts.
At Thursday’s sentencing, a Seattle judge imposed a two-year sentence. Shetty was also ordered to make full restitution of the stolen funds and to serve three years of supervised release following the completion of the sentence.
As of today, the market cap of cryptocurrencies stood at $2.3 trillion. Chart: TradingView
How market timing made it worse
The timing of the move put Shetty at the center of one of crypto’s most chaotic periods. The crash of TerraUSD and its sister token Luna in May 2022 led to a massive market selloff that wiped out billions of dollars in value across the industry.
Reports suggest that Shetty’s DeFi positions were taken in this wave, and that the losses were accelerating enough that the value of the investment would reach zero before a recovery was possible.
The Department of Justice said the disclosure of the transfers was only made because of the market downturn – meaning that the scheme could not have been revealed until later if the conditions had been there.
Where is the SBF application located?
The Shetty case came in the shadow of a much larger crypto scam. Former FTX CEO Sam Bankman-Fried was convicted separately and sentenced to 25 years in prison in 2024.
Bankman-Fried appealed against this sentence. As of Friday, the U.S. Court of Appeals for the Second Circuit had reportedly not issued a decision following arguments heard in November.
The two cases are not related, but both reflect the continuing rationale for federal prosecutors to file criminal charges for crypto-related financial misconduct.
Shetty’s two-year sentence is one of the latest results of the effort, which covers behavior that took place more than three years ago.
Featured image from Aggressive Austin, Texas Criminal Defense Attorney, chart from TradingView
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