I just came across a rather shocking case. Nevin Shetty, the former CFO of Fabric, was recently sentenced to two years in prison for embezzling $35 million to invest in DeFi.

The absurdity of this case lies in the fact that Shetty secretly transferred Fabric’s funds into lending protocols within the Terra/Luna ecosystem through his own business, HighTower Treasury. Those protocols promised high returns that sounded tempting, but the entire ecosystem collapsed in May 2022. The $35 million was basically wiped out.

What’s most ironic? Nevin Shetty’s defense lawyer claimed it was an "unauthorized investment," but the court found that he deliberately concealed transaction information and lied to the board and management, which constituted fraud. As a result, Fabric was forced to lay off 60 employees, severely damaging the company.

This case actually highlights a serious issue: in the high-risk, high-reward world of DeFi, how great are the risks in corporate financial management? Nevin Shetty’s story tells us that no matter how high the APY, it can’t withstand a systemic collapse. Many people are blinded by high yields but overlook the underlying risks.

For me, this serves as a reminder of a fundamental logic: any DeFi protocol promising stable, high returns should be approached with suspicion. Even as ecosystems mature, black swan events can occur, and when they do, the losses are often catastrophic.