Seattle startup’s ex-CFO accused of diverting $35 million, dropping it in crypto crash
A federal indictment accuses the previous chief monetary officer of a Seattle startup of taking $35 million of his employer’s cash with out permission and dropping it by investing in cryptocurrency earlier than the crypto market crashed final 12 months
SEATTLE — The previous chief monetary officer of a Seattle-based startup took $35 million of his employer’s cash with out permission and misplaced it by investing in cryptocurrency earlier than the crypto market crashed final 12 months, in line with a federal indictment returned by a grand jury Wednesday.
Nevin Shetty, 39, was employed in March 2021 as CFO of Cloth, which makes software program platforms for retail commerce.
A few 12 months later, after the corporate knowledgeable him it was letting him go over job efficiency considerations, he secretly took the cash and transferred it to HighTower Treasury, a crypto platform he managed as a facet enterprise, the indictment mentioned.
His thought was to pay the corporate 6% curiosity whereas retaining income above that, however quickly the $35 million funding was virtually nugatory, the U.S. Lawyer’s Workplace in Seattle mentioned in a information launch.
The indictment in U.S. District Courtroom charged Shetty with 4 counts of wire fraud. He’s scheduled to be arraigned Could 25.
Shetty’s legal professional, Cooper Offenbecher, mentioned in an emailed assertion that he and his shopper had been in common contact with prosecutors and disagreed with the choice to deliver an indictment.
“Because the CFO of his former employer, tasked with making funding selections for its profit, Mr. Shetty was personally devastated by these losses, which occurred because of a catastrophic crash within the cryptocurrency market in Could 2022,” Offenbecher wrote. “We look ahead to responding to those allegations in Courtroom.”
Prosecutors, nonetheless, mentioned that as the corporate raised lots of of tens of millions of {dollars} in startup funding, it adopted a conservative strategy to managing that cash — a coverage that Shetty had helped draft.
Based on the Seattle tech information web site GeekWire, Cloth had raised greater than $293 million by February 2022 and was valued at $1.5 billion.
The corporate didn’t instantly reply to a message searching for remark Wednesday.