Reading 2 minutes Views 4 Published Updated
On May 17, the U.S. District Court in Seattle indicted Nevin Shetty, former chief financial officer (CFO) of a Seattle start-up company, on charges of wire fraud.
The indictment alleges that Shetty, 39, transferred about $35 million from the startup’s coffers to a cryptocurrency platform under his personal control. Known as HighTower Treasury, Shetty reportedly created the platform in February 2022, shortly before he was notified of his impending departure as CFO due to concerns about his job.
Between April 1 and 12, 2022, Shetty allegedly transferred a significant amount of $35,000,100 from his employers to an account linked to HighTower without the knowledge of others in the company. The intended purpose of this transaction was for HighTower to set aside funds for investments in the decentralized finance (DeFi) sector of the cryptocurrency market. This arrangement assumed that Shetty’s company would receive an interest rate of 6%, while the remaining interest would remain with HighTower, potentially generating a significant profit.
Prosecutors say the value of Shetty’s cryptocurrency investment began to decline rapidly, and by May 13, 2022, the $35 million investment was all but worthless. Upon discovering the theft, the start-up immediately reported the incident to the Federal Bureau of Investigation (FBI), which initiated an investigation into the case. If Shetty is found guilty of wire fraud, he could face a maximum sentence of 20 years in prison. He is expected to appear in court on May 25, 2023.
Related: Government regulators crack down on fraudulent cryptocurrencies promoted as ‘Elon Musk’s AI token’ and ‘TruthGPT coin’
In a similar case, Cooper Morgenthau, former CFO of the African Gold Acquisition Corporation (AGAC), was sentenced to three years in prison for embezzling more than $5 million from several Special Purpose Acquisition Companies (SPACs). Between June 2021 and August 2022, Morgenthau transferred about $1.2 million into his personal accounts and used the money to trade cryptocurrencies and “meme stocks”, resulting in significant losses.