A CFO Secretly Moved $35 Million Into His Own DeFi Platform — Then Terra Collapsed - Crypto Economy

TL;DR

• A CFO secretly diverted $35 million in company funds to risky DeFi protocols.
• The Terra ecosystem collapse erased nearly the entire $35 million position.
• The company laid off 60 employees to absorb the devastating financial loss.

Nevin Shetty held one of the most trusted positions a company offers: chief financial officer. He also drafted the firm’s investment policy, which he described internally as “conservative.” Behind the policy document, however, Shetty ran a separate operation — and in April 2022, after learning his CFO role would end due to performance issues, he accelerated it.

Over the weeks that followed, Shetty transferred $35 million in company funds to HighTower Treasury, a DeFi lending platform he operated with a business partner. The money went into high-yield protocols advertising returns of 20% or more. His plan carried a built-in extraction mechanism: pay his employer a fixed, smaller return and keep the surplus inside HighTower. In its first month, the arrangement generated $133,000 for Shetty and his partner. The numbers worked. Until they didn’t.

The Terra Collapse Erased Nearly Everything

In May 2022, the Terra blockchain network imploded in one of the fastest value destructions in crypto market history. The DeFi protocols where Shetty had parked company capital collapsed alongside it. HighTower’s $35 million position fell to near zero within days. The scheme that had quietly generated six figures in its opening month left almost nothing behind.

Shetty confessed to colleagues and the company fired him. Trial judge Tana Lin described the impact on the firm as “significant and severe,” stating directly that his actions “almost put the company out of business.” To absorb the loss, the employer laid off 60 people — employees who paid the operational cost of a decision they had no knowledge of and no part in.


A federal jury found Shetty guilty of wire fraud last November. Prosecutors pushed for a nine-year sentence, arguing the case required stern punishment to reflect the scale of deception involved and the damage inflicted on the workforce. Judge Lin sentenced him to two years in prison, well below the prosecution’s request. After release, Shetty will serve three years of supervised release and must obtain prior approval from his probation office before serving as an officer or director of any company.

The court also ordered Shetty to pay $35,000,100 in restitution — a figure that covers the full amount diverted, plus $100. For the 60 people who lost their jobs, the dollar figure on paper closes a legal case. The professional disruption it represents closes nothing at all.