Blockparty’s former chief technology officer was arrested on Wednesday after US prosecutors claimed he stole more than $1 million in cash and cryptocurrencies 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 in 2019 after refusing to return $1 million in company-owned funds that he wanted to keep in his bank account while block partying another bank sought, prosecutors said. Thapa, who was arrested in Southern California, is facing a wire fraud case.
The case comes amid heightened uncertainty in the cryptocurrency industry, which is experiencing a downturn exacerbated by the collapse of cryptocurrency exchange FTX.
The San Diego Federal Office of Public Defenders, which normally represents defendants after they are arrested, did not immediately respond to a request for comment.
A Blockparty representative did not respond to a similar request.
Prosecutors say in the indictment released Wednesday in Manhattan federal court that Thapa took $1 million from the company to “protect” it as it attempted to diversify its banking options in the event its main bank shuts down to deal with cryptocurrency companies to work together.
He spent the money on nightclubs, travel, clothing and other personal expenses, prosecutors said.
Thapa is also accused of stealing bitcoin from the company and deleting the company’s CEO’s email account to cover it up.
Prosecutors said Thapa traveled to Italy in July 2019 to sell some of the company’s native cryptocurrency without permission for what turned out to be counterfeit money.
Thapa could face up to 20 years in prison if convicted of the wire fraud.
New Jersey-based Blockparty started as a blockchain-based event ticketing platform and launched a marketplace for non-fungible or NFT tokens in 2020, according to the company’s website.
NFTs are a blockchain-based asset that represents a digital file such as an image, video, or an item in an online game. Its popularity exploded in 2021 as crypto-rich speculators rushed to cash in on soaring prices, but sales volume has plummeted in recent months.
Source: United States Attorneys
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In your opinion, should marketplaces for NFTs be better regulated by law?