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In short
- Nevin Shetty, former CFO of a software company, was convicted of wire fraud for secretly transferring $35 million in company funds into his own crypto platform after learning he would be fired.
- He put the money into risky DeFi lending protocols, briefly earning profits before the collapse of Terra wiped the investment to near zero.
- A federal jury in Seattle found him guilty on four counts; he will be sentenced in February and faces up to 20 years in prison.
A Washington man was convicted in a federal jury trial this week of taking tens of millions of dollars from the company he worked for — and losing nearly all of it in a crypto game gone wrong.
Nevin Shetty, 41, was convicted on Thursday of four counts of fraud for taking and misappropriating funds worth $35 million from a private software company where he worked as CFO.
Although Shetty himself wrote a conservative investment policy for the startup – which required its money to be invested only in FDIC-insured treasury and bank accounts – the executive soon secretly lent tens of millions of dollars of the company’s funds to a crypto platform that he himself had developed.
Shetty chose to transfer the funds to his cryptocurrency weeks after receiving news that he would soon be let go due to performance issues, according to federal prosecutors.
Through his crypto platform, HighTower Treasury, Shetty has invested the company’s funds in a variety of high-yield decentralized finance (DeFi) lending protocols.
The plan worked, at least initially. During the first few weeks of the scheme, in April 2022, Shetty generated more than $133,000 in profit for himself and his business partner.
But then came the dark winter. In early May 2022, the stablecoin algorithm Terra collapsedinstantly announcing $60 billion in value and dragging the rest of the crypto market with it.
In the days that followed, Shetty’s $35 million in crypto investments plummeted toward worthlessness. By May 13, 2022, they had fallen to an almost zero value.
Shortly after the funds were removed, Shetty told two of his colleagues at the software company what had happened. He was promptly fired.
A Seattle jury convicted Shetty of four counts of fraud after 10 hours of deliberation.
The executive will be sentenced in February, and face up to 20 years in prison.
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