Cryptocurrency data analytics company Bitquery has filed a federal lawsuit against its former Chief Executive Officer, Vasilios Karakitsos, accusing him of siphoning over $5 million in corporate funds into personal accounts and associated commercial entities. According to legal filings submitted by the firm, Karakitsos allegedly engaged in a systematic financial diversion scheme dating back to 2022, shortly after outside investors injected approximately $8 million into the platform. Bitquery, which specializes in tracking cryptocurrency prices, blockchain transaction flows, and digital wallet analytics, claims that Karakitsos exploited his sole administrative control over company financial accounts to execute unauthorized wire transfers to entities under his personal control, including a business entity registered in the United Kingdom.
The lawsuit further alleges that the former executive provided investors and internal stakeholders with fabricated financial representations to obscure the ongoing drain of corporate reserves. Karakitsos reportedly assured investors that Bitquery maintained cash reserves between $5 million and $6 million in its primary bank accounts. However, subsequent forensic financial reviews revealed that the company generated roughly $2 million in annual revenue throughout 2024 and 2025, operating with matching expenditure levels that left minimal true cash reserves. Bitquery contends that these inflated financial figures were deliberately presented to prevent investors and co-founders from discovering the unauthorized capital transfers.
Mass Deletion of Accounting Records and Abrupt Resignation
The legal complaint details an extensive cover-up operation executed shortly before Karakitsos abruptly resigned from his executive position in October 2025. According to court documents, Karakitsos accessed Bitquery’s QuickBooks financial accounting software and deleted 194 expense entries, bill receipts, and ledger items. Forensic audit logs indicate that the erased records explicitly documented monetary transfers from Bitquery’s operational bank accounts directly into Karakitsos’s private bank accounts and associated business entities. In addition to deleting entries, he allegedly altered existing accounting records to mischaracterize remaining transactions and hinder internal forensic auditing.
Despite his sudden departure, Bitquery claims that Karakitsos continues to hold administrative credentials and primary access keys to the company’s core banking accounts, refusing to relinquish control to incoming executive leadership. In court filings, Bitquery expressed grave concern over the ongoing operational risks, stating that every day the former executive retains exclusive control over financial credentials exacerbates the material harm to the organization. Following Karakitsos’s resignation, Bitquery appointed co-founder Aleksey Studnev as Chief Executive Officer to stabilize company operations, secure digital infrastructure, and lead legal recovery efforts.
Legal Demands and Defense Response
Through its federal lawsuit, Bitquery is seeking the return of at least $5 million in misappropriated capital, alongside compensatory damages, punitive relief, and an immediate court order mandating the surrender of all corporate banking credentials. The company is also demanding a formal judicial accounting of all personal real estate, digital assets, and corporate property allegedly purchased using diverted company money. The organization maintains that retrieving these assets is essential to protecting investor equity and restoring operational integrity across its global cryptocurrency data tracking services.
In response to the legal action, Karakitsos has publicly denied all allegations of financial misconduct, asserting his intent to contest the claims through formal legal channels. In a brief public statement, Karakitsos stated that he strongly disagrees with the allegations presented in the lawsuit and intends to respond through the judicial process. As the lawsuit moves forward in federal court, industry observers emphasize that the dispute underscores critical governance challenges facing growing technology and cryptocurrency analytics firms, where centralized administrative control over digital assets and financial accounts can create severe operational vulnerabilities.
