The case comes amid increased uncertainty in the crypto currency industry, which is in the midst of a downturn made worse by the collapse of crypto exchange FTX
The former chief technology officer of Blockparty was arrested on Wednesday after U.S. prosecutors alleged he stole more than $1 million in cash and crypto currency from the company, which operates a marketplace for non-fungible tokens.
Rikesh Thapa, 28, of San Diego, California, co-founded the company in 2017 and left it in 2019 after refusing to return $1 million in company funds he agreed to hold in his bank account while Blockparty looked for another bank, prosecutors said. Thapa, who was arrested in Southern California, faces one count of wire fraud.
The case comes amid increased uncertainty in the crypto currency industry, which is in the midst of a downturn made worse by the collapse of crypto exchange FTX.
Prosecutors allege in the indictment unsealed in Manhattan federal court on Wednesday that Thapa took $1 million from the company for ‘safekeeping’ while it looked to diversify its banking options in case its main bank stopped doing business with crypto firms.
He spent the money instead on nightclubs, travel, clothing and other personal expenses, prosecutors said.
Thapa is also accused of stealing bitcoins from the company and deleting the email account of the company’s chief executive to cover it up.
Prosecutors said Thapa travelled to Italy in July 2019 to sell some of the company’s native crypto currency without authorization for what turned out to be counterfeit money.
Thapa could face up to 20 years in prison if convicted on the wire fraud charge.
Headquartered in New Jersey, Blockparty began as a platform for blockchain-based event ticketing, and launched a marketplace for non-fungible tokens or NFTs in 2020, according to the company’s website.
