AP Technology

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

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

Nevin Shetty, 39, was hired in March 2021 as CFO of a company called fabric, which makes software platforms for retail commerce.

About a year later, after the company informed him it was letting him go over job performance concerns, he secretly took the money and transferred it to HighTower Treasury, a crypto platform he controlled as a side business, the indictment said.

His idea was to pay the company 6% interest while retaining profits above that, but soon the $35 million investment was practically worthless, the U.S. Attorney’s Office in Seattle said in a news release.

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

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

“As the CFO of his former employer, tasked with making investment decisions for its benefit, Mr. Shetty was personally devastated by these losses, which occurred as a result of a catastrophic crash in the cryptocurrency market in May 2022,” Offenbecher wrote. “We look forward to responding to these allegations in Court.”

Prosecutors, however, said that as the company raised hundreds of millions of dollars in startup funding, it adopted a conservative approach to managing that money — a policy that Shetty had helped draft.

According to the Seattle tech news website GeekWire, fabric had raised more than $293 million by February 2022 and was valued at $1.5 billion.

In an emailed statement, the company said it had been cooperating with law enforcement and appreciated the work of the FBI and federal prosecutors.

“While the amount taken is substantial, fabric remains very well-funded with years of runway,” the statement said.

Tags

Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP

main area bottom custom html

MAIN Area bottom

Main area bottom