Seattle Jury Convicts Ex-CFO Nevin Shetty in $35 Million Crypto Fraud Case

• Nevin Shetty, former CFO, secretly transferred company funds to his entity HighTower Treasury in April 2022, violating investment policies.

• The funds were invested in DeFi protocols promising 20% yields, but collapsed to zero by May 2022 due to crypto market downturns.

• Shetty faces up to 20 years in prison; the trial concluded on November 7, 2025, with sentencing set for February 11, 2026.

Nevin Shetty crypto fraud conviction shocks the industry: Ex-CFO diverts $35M to DeFi, loses it all. Uncover details, risks, and lessons for secure investments. Stay informed on crypto news today.

What is the Nevin Shetty Crypto Fraud Conviction?

Nevin Shetty crypto fraud conviction refers to the federal case where a former chief financial officer was held accountable for embezzling corporate funds into volatile cryptocurrency investments. In March 2021, Shetty joined a private software company as CFO, where he helped establish conservative financial policies limiting investments to FDIC-insured accounts. However, in April 2022, facing job termination, he illicitly moved over $35 million to his own entity, leading to devastating losses and his eventual guilty verdict on four counts of wire fraud.

How Did Nevin Shetty Divert Funds into Crypto?

As CFO, Nevin Shetty drafted an investment policy statement emphasizing capital preservation through low-risk options like bank accounts and treasuries. This approach was designed to support the company’s growth during funding rounds. Yet, between April 1 and 12, 2022, after learning of performance issues that would end his tenure, Shetty executed unauthorized transfers totaling $35,000,100 from the company’s accounts to HighTower Treasury, an entity he controlled. The company’s board and executives remained completely unaware of these actions, which prosecutors described as a deliberate breach of trust. Shetty’s moves were uncovered only after the investments soured, revealing the depth of his deception. According to court documents, this commingling of funds exemplified how internal positions of authority can be exploited, underscoring the need for robust oversight in financial management.

Frequently Asked Questions

What Led to Nevin Shetty’s Arrest in the Crypto Fraud Case?

Nevin Shetty’s arrest stemmed from his confession to colleagues after the crypto investments he made with stolen funds plummeted. Hired in 2021, he violated company policy by diverting $35 million to DeFi platforms in 2022, earning initial profits before total collapse. The company reported the incident to the FBI, leading to federal charges of wire fraud, as detailed in trial proceedings.

Why Did the Nevin Shetty Crypto Scheme Fail So Quickly?

The Nevin Shetty crypto scheme failed due to extreme market volatility in decentralized finance. Shetty invested the diverted funds into DeFi lending protocols offering around 20% yields, planning to return 6% to his employer while pocketing the rest. In the first month, it generated about $133,000, but by May 13, 2022, the value dropped to near zero as broader crypto markets crashed, wiping out the principal entirely.

Key Takeaways

• Corporate Safeguards Matter: Shetty’s case shows that even well-drafted investment policies require vigilant enforcement and integrity from executives to prevent fraud.
• Crypto Volatility Risks: High-yield DeFi promises can lead to rapid losses, as seen when Shetty’s $35 million investment vanished in weeks amid market downturns.
• Legal Consequences Are Severe: Convicted on wire fraud, Shetty faces up to 20 years; companies should report suspicions promptly to authorities like the FBI for swift action.

Conclusion

The Nevin Shetty crypto fraud conviction serves as a stark reminder of the perils associated with unauthorized forays into high-risk cryptocurrency ventures, particularly when they involve corporate funds. U.S. Attorney Neil Floyd emphasized how Shetty “exploited his position of power and trust,” a sentiment echoed by prosecutors who attributed the crime to greed. As the sentencing on February 11, 2026, approaches, this case reinforces the importance of ethical financial practices and the inherent dangers of DeFi overleveraging. Investors and executives alike should prioritize compliance and risk assessment to avoid similar pitfalls in the evolving crypto landscape, ensuring sustainable growth without compromising integrity.

The trial, lasting nine days and concluding on November 7, 2025, after ten hours of deliberation, highlighted key evidence from FBI investigations and company records. Shetty’s initial success in earning yields gave way to catastrophe, illustrating the unpredictable nature of crypto markets. Expert analysis from financial regulators, such as those referenced in federal filings, points to the need for better internal controls in tech firms handling large cash reserves. This incident not only impacts Shetty personally but also prompts broader industry reflection on fiduciary duties in an era of digital assets.

From a regulatory perspective, cases like this bolster efforts to enhance transparency in crypto transactions. The prosecutor’s closing argument framed the motive simply: “Greed – to line his own pockets,” a narrative that resonated with the jury. As crypto adoption grows, understanding these real-world examples is crucial for mitigating fraud risks and promoting responsible innovation.