An NFT startup founder is facing federal fraud charges after prosecutors alleged he stole millions of dollars from investors to bankroll his personal lifestyle, including a loan for a Miami condominium and his DJ hobby.

On Wednesday, Miami resident Taj Tarsha, 34, was charged with securities fraud and wire fraud — each of which could mean a maximum prison sentence of 20 years. Prosecutors alleged that Tarsha made deceptive claims about how he planned to use investor funds through his company Few and Far Limited.

The company was pitched as a decentralized marketplace for NFTs, funded by "Simple Agreement for Future Tokens", or SAFTs, where investors paid for the rights to those tokens to obtain later on. Tarsha raised over $10 million by selling 95 million of those tokens to almost 70 investors, prosecutors said.

However, right after getting investors' funds, prosecutors say Tarsha used them instead for gambling, to buy speculative digital assets, and later for a loan for a Miami condo and interior design, and to support his DJ hobby.

More than a year after soliciting investments for his company, an audit revealed Tarsha's misappropriation of funds. Prosecutors said Tarsha lied to investors by saying that "bonuses were tied to predetermined FAR token presales targets."

"In reality, he had fired nearly all staff and instructed the remaining contractor to do work that merely created the appearance of continued development of the marketplace," prosecutors said.

Tarsha's case was assigned to U.S. District Judge Lewis Kaplan of New York. Kaplan presided over the sentencing of former FTX CEO Sam Bankman-Fried.