He told his colleagues only after the money was gone. Nevin Shetty, the former chief financial officer of a Seattle-based tech startup, was sentenced Thursday to two years in federal prison after secretly transferring $35 million in company funds into a cryptocurrency platform he ran on the side — then watching nearly all of it disappear in a matter of months.
A Scheme That Ran In Secret
Shetty made the transfers in 2022 without the knowledge of a single executive or board member at his employer, according to the US Justice Department.
He moved the funds into a platform called HighTower Treasury, which he controlled, and used the money to pour into high-yield DeFi lending protocols promising annual returns of 20% or more.
In the first month, he cleared $133,000. Then the Terra ecosystem collapsed, and the broader crypto market followed it down.
By May 13, 2022, the value of those investments had fallen to nearly zero. With $35 million essentially wiped out, Shetty approached two fellow executives and told them what he had done. He was fired the same day.
The case sat in federal court for years. Shetty was indicted on wire fraud charges in May 2023. A nine-day jury trial followed in November 2025, ending with a guilty verdict on four counts.
At sentencing Thursday, a Seattle judge handed down the two-year prison term. Shetty was also ordered to repay the stolen funds in full and serve three years of supervised release after completing his sentence.
As of today, 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 at the center of one of crypto’s most chaotic periods. The collapse of TerraUSD and its sister token Luna in May 2022 triggered a broad market selloff that wiped out billions of dollars in value across the industry.
Reports indicate Shetty’s DeFi positions were caught in that wave, with losses accelerating fast enough that the investment value reached near zero before any recovery was possible.
The Justice Department said the disclosure of the transfers came only because of the market downturn — implying that, had conditions held, the scheme might have gone undetected longer.
Where The SBF Appeal Stands
Shetty’s case unfolded in the shadow of a far larger crypto fraud. Former FTX chief executive Sam Bankman-Fried was convicted separately and sentenced to 25 years in prison in 2024.
Bankman-Fried has appealed that ruling. As of Friday, the US Court of Appeals for the Second Circuit had not issued a decision following arguments heard in November, according to reports.
The two cases are unrelated, but both reflect federal prosecutors’ continued push to bring criminal charges over crypto-related financial misconduct.
Shetty’s two-year sentence stands as one of the more recent outcomes in that effort, covering conduct that took place more than three years ago.
Featured image from Aggressive Austin, TX Criminal Defense Attorney, chart from TradingView
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
