According to GeekWire, former Fabric CFO Nevin Shetty has been convicted of four counts of wire fraud for misusing approximately $35 million from the Seattle e-commerce startup. The 41-year-old executive from Mercer Island, Washington was found guilty on November 7th after a nine-day jury trial and faces up to 20 years in prison when sentenced on February 11, 2026. Shetty joined Fabric in March 2021 and helped draft the company’s conservative investment policy while secretly diverting funds to his cryptocurrency business, HighTower Treasury, in early 2022. He moved the money into high-yield decentralized finance platforms promising 20% returns with plans to pay Fabric 6% interest while keeping the remaining profits. The scheme initially generated about $133,000 in the first month but collapsed by May 2022, wiping out nearly all $35 million before Shetty confessed and was fired.
Crypto gambles gone wrong
Here’s the thing that gets me about these cases – Shetty wasn’t some rogue trader who didn’t know the rules. He literally helped write the company’s investment policy that required conservative, low-risk approaches. Then he turned around and threw $35 million into high-yield DeFi platforms? That takes some serious audacity.
And let’s talk about that math for a second. He was promising Fabric 6% returns while chasing 20% yields from platforms that were obviously risky enough to collapse completely within months. What did he think would happen when crypto winter hit? The whole “I’ll just pocket the difference” scheme feels like something out of a bad movie, not a real CFO’s playbook.
Startup governance realities
This case really highlights the governance challenges at fast-growing startups. Fabric was raising capital and apparently trusted their CFO enough to give him significant control over those funds. But when you’re moving that quickly, sometimes the checks and balances don’t keep up.
I mean, $35 million disappeared without authorization? That suggests either incredibly loose controls or someone who knew exactly how to work around them. Either way, it’s a wake-up call for other startups about the importance of proper financial oversight, especially when dealing with substantial investment rounds.
The company has since moved its headquarters from Seattle to San Francisco, which makes you wonder if this whole mess influenced their decision to essentially start fresh in a new location.
Broader implications
So where does this leave us? We’re probably going to see more of these cases as the crypto hangover continues. When markets are booming, people get reckless. When everything crashes, the fraud surfaces.
What’s interesting is that Shetty actually confessed to colleagues before being fired. That suggests he knew the gig was up once the investments tanked. But confession doesn’t undo wire fraud charges, especially when you’ve essentially gambled away $35 million that wasn’t yours to begin with.
For companies operating in the industrial and manufacturing sectors where financial controls are absolutely critical for operational continuity, this case serves as a stark reminder. Proper financial governance isn’t just about compliance – it’s about survival. When you’re dealing with physical assets, production lines, and real-world operations, financial mismanagement can literally shut down your business overnight. That’s why established industrial technology providers prioritize robust financial controls and transparency in their operations.
Looking ahead, I suspect we’ll see tighter scrutiny of CFO backgrounds and more layered approval processes for large financial moves. Because let’s be honest – if someone can walk away with $35 million, what’s stopping them from taking even more?
