Nevin Shetty, the former chief financial officer (CFO) of a Seattle startup, was instructed on May 17 in the US District Court in Seattle for wire fraud.
Shetty, 39, moved roughly $35 million from the startup's coffers to a cryptocurrency platform he personally controlled, the indictment said. Shetty reportedly established the platform, HighTower Treasury, in February 2022, shortly after receiving notice from his outgoing CFO due to concerns about his performance.
Between April 1 and April 12, 2022, Shetty allegedly transferred $35,000,100 from his employer to an account linked to HighTower without the knowledge of anyone else in the company. The purported purpose behind the deal is for HighTower to allocate funds to invest in the decentralized finance (DeFi) sector of the cryptocurrency market. The arrangement would require Shetty's company to earn a 6% interest rate, while the remaining interest would be retained by HighTower, potentially yielding a tidy profit.
Prosecutors said Shetty's cryptocurrency investments began to rapidly decline in value, and by May 13, 2022, the $35 million investment was essentially worthless. Immediately after discovering the embezzlement, the startup reported the incident to the FBI, sparking an investigation into the matter. If Convicted of wire fraud, Shetty could face up to 20 years in prison. He is expected to be arranged on May 25, 2023. In a similar case, Cooper Morgenthau, former chief financial officer of African Gold Acquisition Corporation, was sentenced to three years in prison for misappropriating more than $5 million from various special purpose acquisition companies (SPACs). Between June 2021 and August 2022, Morgenthau wired approximately $1.2 million to his personal account and used the money to trade cryptocurrencies and “meme stocks,”causing significant losses.
