Seattle startup’s ex-CFO accused of embezzling $35 million and losing it in crypto crash

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A federal indictment accuses the former CFO of a Seattle startup of taking $35 million of his employer’s money without permission and losing it investing in cryptocurrency before the crypto market did not crash last year

By

GENE JOHNSON Associated Press

May 17, 2023, 8:35 p.m. ET

2 minute read

SEATTLE — The former CFO of a Seattle-based startup took $35 million of his employer’s money without permission and lost it investing in cryptocurrency before the crypto market crashed. collapsed last year, according to a federal indictment returned by a grand jury on Wednesday.

Nevin Shetty, 39, was hired in March 2021 as chief financial officer of Fabric, which makes retail software platforms.

About a year later, after the company informed him that it was letting him deal with his work performance issues, he secretly took the money and transferred it to HighTower Treasury, a platform. cryptographic form he controlled as a side business, according to the indictment.

His idea was to pay the company 6% interest while retaining profits above that, but soon the $35 million investment was virtually worthless, the US attorney’s office in Seattle said in a statement. Press release.

The indictment in the U.S. District Court charged Shetty with four counts of wire fraud. He is due to be arraigned on May 25.

Shetty’s attorney, Cooper Offenbecher, said in an emailed statement that he and his client have been in regular contact with prosecutors and disagree with the decision to file an indictment.

As the chief financial officer of his former employer, tasked with making investment decisions for his benefit, Mr Shetty was personally devastated by these losses, which occurred following a catastrophic crash in the stock market. cryptocurrency in May 2022, Offenbecher wrote. “We look forward to responding to these allegations in court.

Prosecutors, however, said that while the company raised hundreds of millions of dollars in seed funding, it took a conservative approach to handling that money, a policy Shetty helped draft.

According to Seattle technology news website GeekWire, Fabric had raised more than $293 million as of February 2022 and was valued at $1.5 billion.

The company did not immediately respond to a message seeking comment on Wednesday.

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