Washington Individual Receives 2-Year Sentence for Misappropriating $35 Million to Unsuccessful DeFi Platform

A man from Washington state has received a two-year federal prison sentence after misappropriating $35 million from his employer to finance a personal decentralized finance project that ultimately failed during the 2022 cryptocurrency market decline.

Key Takeaways:

• A former CFO from Washington was sentenced to two years in prison for misappropriating $35 million in company funds for a failed DeFi investment scheme.
• The cryptocurrency strategy collapsed during the 2022 market downturn following the crash of the Terra ecosystem.
• The financial losses had a significant impact on the company, leading to layoffs and nearly forcing the business to close.

Nevin Shetty, 42, was found guilty of wire fraud in November after prosecutors demonstrated that he covertly transferred company funds into a cryptocurrency investment scheme associated with his side venture, HighTower Treasury.

The funds were from a private software firm where Shetty held the position of chief financial officer.

Prosecutors Claim CFO Diverted Funds After Learning of Job Termination

The US Department of Justice reported that Shetty created a conservative investment policy for the company that restricted the use of corporate funds.

Despite these internal regulations, he transferred tens of millions of dollars from the company’s accounts after being informed in April 2022 that his employment would be terminated due to performance issues.

The funds were directed to HighTower Treasury, where Shetty and a business partner heavily invested in decentralized finance lending protocols that promised annual returns of 20% or more.

Prosecutors indicated that Shetty planned to return a fixed amount to the company while retaining the remaining profits generated by the cryptocurrency strategy.

Initially, the scheme yielded modest returns. Court documents reveal that the operation generated approximately $133,000 in its first month.

However, the overall cryptocurrency market soon experienced a significant downturn following the collapse of the Terra ecosystem in May 2022.

As the market declined, the value of HighTower’s investments quickly diminished. The investments linked to Shetty’s strategy plummeted from around $35 million to nearly zero during the ensuing crypto winter.

Once the losses became apparent, Shetty confessed his actions to colleagues at the firm. He was subsequently terminated from his position.

JUST IN: NEVIN SHETTY SENTENCED TO 2 YEARS IN PRISON FOR $35M DEFI THEFT
Shetty secretly moved $35 million in company funds to his side business HighTower Treasury
Those funds were then invested in high-yield DeFi lending protocols that promised returns of 20% or more.… pic.twitter.com/VIrKyXYp2N

— BSCN (@BSCNews) March 6, 2026

During the sentencing, US District Judge Tana Lin remarked that the incident caused significant harm to the business. The court noted that the company faced “significant and severe effects” from the losses and was nearly forced to cease operations.

The financial repercussions also led to layoffs, with approximately 60 employees losing their jobs as the company sought to stabilize its operations following the missing funds.

Federal prosecutors had sought a nine-year prison sentence, contending that Shetty’s actions involved deceit and caused lasting damage to the company and its employees. The court ultimately imposed a shorter sentence of two years.

Washington Man Ordered to Pay $35M Restitution After DeFi Fraud

In addition to his prison sentence, Shetty was mandated to pay $35,000,100 in restitution. Following the completion of his sentence, he will be under supervised release for three years.

Judge Lin also placed restrictions on Shetty’s future employment, barring him from serving as an officer or director of any company without the approval of the probation office.

Last month, two teenagers from California faced serious felony charges after authorities reported that they traveled hundreds of miles to execute a violent home invasion in Scottsdale, Arizona, in an attempt to acquire cryptocurrency believed to be worth $66 million.

This case emerged amid a broader increase in so-called wrench attacks, physical assaults aimed at coercing cryptocurrency holders to surrender private keys.

Security researcher Jameson Lopp’s public database records approximately 70 such incidents in 2025, a notable rise from the previous year.

Security analysts indicate that criminals are increasingly utilizing leaked personal information to identify targets and are recruiting young offenders online to minimize traceability.

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