US DOJ charges former CTO of blockchain company for fraud scheme

The US Depart­ment of Jus­tice said it has arrest­ed Rikesh Tha­pa, the for­mer chief tech­nol­o­gy offi­cer of a blockchain com­pa­ny, for alleged­ly defraud­ing his com­pa­ny of over $1 million.

The DOJ did not name the com­pa­ny in its Dec. 7 news release.

Thapa’s LinkedIn reveals that he co-found­ed the blockchain com­pa­ny Block­par­ty in 2017 and served as its CTO up until 2019.

Accord­ing to the DOJ’s fil­ing on Dec. 7, Tha­pa alleged­ly defraud­ed his com­pa­ny of cash and cryp­to assets worth over $1 million.

Back in 2018, the unnamed blockchain com­pa­ny had a bank­ing chal­lenge that caused it to send about $1 mil­lion to Thapa’s per­son­al account for safe­keep­ing. Unfor­tu­nate­ly, the Founder and CTO mis­man­aged the funds on per­son­al and lux­u­ri­ous expenses.

To con­ceal his crime, Tha­pa forged his bank state­ment to claim that held about $21 mil­lion. After much ado, he alleged­ly refused to return the $1 mil­lion to the company.

In anoth­er instance, Tha­pa con­spired to sell about 174,285 of the blockchain company’s util­i­ty tokens for an undis­closed amount. He failed to remit the funds to the com­pa­ny, claim­ing that the cash he received from the investors were counterfeit.

Tha­pa was arrest­ed on Oct. 7, 2022, by the DOJ. Speak­ing on the arrest, U.S. Attor­ney Dami­an Williams said:

“Rikesh Tha­pa alleged­ly betrayed his company’s trust, as he was respon­si­ble for the safe­guard­ing of sub­stan­tial amounts of mon­ey. Tha­pa ent to great lengths to cov­er up his frauds.”

Fol­low­ing his arrest, Tha­pa will face charges of wire fraud and risk impris­on­ment of up to 20 years in prison if proven guilty.