A former chief financial officer has been sentenced to two years in prison after diverting company funds into cryptocurrency-related investments, with the court also ordering him to pay more than $35 million in restitution. Court records said the money was moved despite the company’s strict investment rules, with a large share routed into HighTower Treasury, a startup founded by Shetty, to chase returns in DeFi markets.
Company funds were redirected into high-yield DeFi platforms
According to the case details, Shetty spread the money across platforms advertising annual returns above 20%. That strategy looked profitable at first. In the first month alone, the investments generated about $133,000 in profit.
The gains did not last. The collapse of the Terra ecosystem, followed by a steep market downturn, erased nearly all of the investment. HighTower’s portfolio had reached a peak value of about $35 million, but that value fell quickly, leaving little chance of recovery. Once the losses became clear, Shetty reported the situation to his employer and was dismissed shortly after.
Losses pushed the company toward crisis and led to layoffs
The damage went beyond the failed crypto positions. Court documents said the financial hit threatened the company’s survival, forcing management to cut nearly 60 jobs in an effort to stay afloat. U.S. District Judge Tana Lin said the impact on the company was “substantial and severe.”
Prosecutors argued that Shetty’s conduct caused lasting harm to both the business and its employees, and they asked the court to impose a nine-year prison sentence. The court chose a shorter term and handed down a two-year sentence instead. Judge Lin also said the scale of the losses brought the firm close to shutting down.
Restitution, supervised release, and future work restrictions
Beyond the prison term, Shetty will face three years of supervised release after incarceration. The ruling also places limits on his future employment: any managerial position at a company will require prior court approval. That means the legal consequences extend well past the prison sentence itself.
The report described the case as a prominent example of the risks tied to crypto investing in the United States. It also noted a rise in physical attacks and scams aimed at cryptocurrency holders. Security analyst Jameson Lopp’s public database has recorded nearly 70 similar incidents in 2025 alone. Experts cited in the report said criminals are using personal data available online to identify crypto investors, while younger people are being drawn into these risky ventures at a troubling pace.