US Prosecutors Arrest Blockparty Co-Founder for Wire Fraud

UTC by Ibukun Ogundare · 3 min read
US Prosecutors Arrest Blockparty Co-Founder for Wire Fraud
Photo: Unsplash

The Blockparty co-founder executed the fraud while he was the CTO between December 2017 and September 2019.

The co-founder of Blockparty Rikesh Thapa has been arrested over the theft of more than $1 million in cash, crypto, and utility tokens. The US prosecutors charged Thapa, the company’s chief technology officer between 2017 and 2019, was arrested on 7th December for wire fraud. This news contributes to the ongoing tension in the crypto and NFT markets. There have been uncertainties in the crypto space since the collapse of the crypto exchange FTX, and recent happenings have triggered more fears among community members.

According to the prosecutors, the Blockparty co-founder used the money he swindled from the company on luxurious goods. Specifically, Thapa allegedly used the swindled money on “personal expenses, including nightclubs, travel, and clothing.” He further falsified the company’s record and deleted evidence that could reveal his actions.

The Blockparty co-founder executed the fraud while he was the CTO between December 2017 and September 2019. Thapa had $1 million of the company’s money in his personal account while it sought other banking options. Instead of keeping the funds, the former CTO began to use them on personal expenses. To cover his tracks, he presented a forged bank statement that showed that he had more than $21 million, including the company’s funds. As a matter of fact, the former executive did not have up to the amount in his bank account, and there was no special savings account for the $1 million as he claimed.

Blockparty Co-Founder Steals from Company

Thapa did not stop at squandering the money in his care. He also used his position to embezzle crypto. The co-founder robbed Blockparty of at least 10 BTCs. The Department of Justice (DOJ) explained that he diverted at least one of the company’s Bitcoins and sold it for almost $6,500. Afterward, Thapa deposited the proceeds into this personal bank account, falsified trading records, and deleted emails to cover his actions. He went further in sending a fraudulent transaction report that gave a misinterpretation of the Bitcoin transaction to the CEO. The CEO requested and received a direct transaction report from the crypto brokerage. This made Thapa disable the chief executive’s email account. The DOJ added that the ex-CTO deleted the email from the crypto brokerage and deleted the entire CEO email account.

Other of his crimes include the theft of utility tokens that can be used to access certain features and services. Unknowingly to the CEO, hapa had a meeting with individuals who had an interest in purchasing the tokens. Ahead of the meeting in Italy, he had provided Thapa account information to the investors to wire funds. However, he agreed to receive cash and transferred around 174,285 of Blockparty’s tokens to the investors.

The US prosecutor wrote that the Office Complex Frauds and Cybercrime Unit is handling the case, and the Blockparty co-founder may face up to 20 years imprisonment.

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