Good day everybody,

Welcome to CryptoGod-1's blog on all things crypto. Today I will be doing a quick writeup on the recent news that a blockchain startup known as CTO has been arrested by the FBI after they are believed to have stolen over $1 million.

Arrest Warrant

The co-founder and former executive of blockchain event start-up known as "Blockparty", Rikesh Thapa, was arrested by the FBI after they alleged over $1 million of crypto and fiat was stolen from the firm. He supposedly stole over 10 Bitcoin from the company and falsified trading records to cover his tracks, according to the Department of Justice. It was on Wednesday, the 8th of December 2022, that the DOJ unsealed the wire fraud charges against Rikesh Thapa, claiming that he had allegedly stolen the money on behalf of his firm and placed it into a personal bank account. This is a common set up given the difficulties that most crypto firms face in getting access to traditional bank accounts, but he also managed to embezel upwards of 10 Bitcoin in the process from Blockparty's holdings. It is claimed he the funds went towards his own personal expenses, which included "nightclubs, travel, and clothing." 

A statement from an FBI agent in charge of the case, Michael Driscollaid, read:

"The defendant repeatedly stole from and defrauded the victim company — which he co-founded — in order to fund a luxurious personal lifestyle," 

Prosecutors also allege that Thapa stole Blockparty’s utility tokens, set up a meeting with would-be investors, and convinced them to give him cash for the assets, and did so without letting the company’s CEO know. This lead to him being able to could pocket the investment. In the official report on the DOJ Website, it states how Thapa mislead the CEO of Blockparty when selling a Bitcoin for approximately $6,500 in 2018 and depositing the proceeds into his own account. He diverted at least one email from his CEO and sent a fraudulent transaction report that misrepresented the August 2018 Bitcoin Transaction. The CEO then went and contacted the companies brokerage, requesting a transaction report, while having Thapa cc'd in on the email. Thapa disabled the CEO's email account and deleted the cryptocurrency brokerage’s email, before deleting the entire email account of the CEO.

What is Blockparty?

Blockparty was launched in 2017 as an event ticketing protocol and NFT marketplace, and was created by Rikesh Thapa along with Shiv Madan and Vladislav Ginzburg. Blockparty promotes itself as the next generation of E-Commerce, claiming that whether you are an individual creator or an established brand, their suite of tools is designed to realize your creative vision today. They allow users to create their own NFT storefront, along with creating unique NFTs and editioned collection which are environmentally-friendly, no fee, multi-chain minting options. A unique selling point of their brand is the ability to accept credit cards and crypto for payment of NFTs, while royalties on secondary sales are also included. They plan on adding the ability for sellers to customise their own storefront in 2022, connect your domain, add your own branding, sell tokenized physical goods, embed secondary sales, and leverage gallery tools.

They are also active on social media, with their Twitter page promoting events and the NFT marketplace, having over 22 thousand followers and regularly posting up to date tweets regarding their brand and events.

Rikesh Thapa

So who is Rikesh Thapa? As mentioned above, he is the co-founder and former executive of Blockparty, and is from San Diego, California. He is also known to have two current jobs, being the as Co-Founder at VerderBlocks while also the CEO at BitOverflow. While working at Blockparty Thapa was the chief technology officer, and is currently 28 years old. It was between 2017 and 2019, while he was CTO, that Thapa committed the alleged offences. In December 2019, Thapa left his role to pursue other ventures, which included founding Verdeblocks, a company which promises the ability to switch energy sourcing into renewables through the use of contracts on Hedera.

Sentence

The count Rikesh Thapa is facing is a single count of wire fraud, which is the US can carry a maximum sentence of up to 20 years in prison. The statutory maximum sentence is prescribed by Congress and only for informational purposes only, meaning he could face less depending on the discretion of the presiding judge. 

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Timothy V. Capozzi is in charge of the prosecution.

The charge contained in the Indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

Interesting times for the Rikesh Thapa, and this is likely to have big consequences for the former and existing companies. While it is another blot of the crypto page, it is also interesting to see the FBI deal with these types of cases and give some hope towards the wider public that the next big crypto case involving the FBI will be for FTX. We can only wait and see.

Have a great day.

Peace. CryptoGod-1.

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