Nevin Shetty, former CFO of Seattle-based startup Fabric, has been sentenced to two years in prison for orchestrating a $35 million wire fraud scheme. Shetty secretly diverted company funds into a high-risk decentralized finance (DeFi) investment through his side business, HighTower Treasury. The scheme involved funneling Fabric's cash into DeFi lending protocols within the Terra/Luna ecosystem, which promised high returns but collapsed in May 2022, resulting in a near-total loss. The financial fallout from Shetty's unauthorized investment forced Fabric to lay off 60 employees, significantly impacting the company. Despite defense claims that Shetty's actions were merely unauthorized investments, the jury found his concealment of the transactions from the board and executives constituted fraud. This case highlights the risks associated with corporate treasury mismanagement in the volatile DeFi sector.
Ex-Fabric CFO Nevin Shetty Sentenced to 2 Years for $35M DeFi Fraud
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