A Manhattan Supreme Court lawsuit filed by Bitquery Inc. accuses its co-founder and former CEO, Dionysios 'Dean' Karakitsos, 57, of siphoning more than $5 million from the crypto data company he helped build — then deleting the evidence on his way out the door.
According to the suit, Karakitsos served as CEO, director, and treasurer of Bitquery, which tracks cryptocurrency values and flows, until 2025. The alleged scheme began around 2022, when investors poured approximately $8 million into the company.
The alleged playbook was straightforward and devastating.
Karakitsos allegedly transferred company funds to multiple entities operated by him and his associates, including one based in the UK, while maintaining sole control over all company banking accounts. He then told investors the company held between $5 million and $6 million in the bank — when, according to the suit, Bitquery earned roughly $2 million in revenue and carried similar operating costs in both 2024 and 2025.
Days before he resigned in October 2025, the filing claims he deleted 194 expense entries and bill records from Bitquery's QuickBooks accounting system and altered remaining records to conceal the transfers. The company says he still holds all banking credentials and refuses to return them.
'The harm to Bitquery is substantial, ongoing, and aggravated by each day that Karakitsos retains exclusive control over the Company's accounts,' the filing states.
Bitquery has since appointed co-founder Aleksey Studnev as CEO. The company is demanding the return of at least $5 million, a full accounting of the misappropriated funds, all banking credentials, and all property purchased with company money. It is also seeking additional damages for legal costs and what it calls 'bad faith' conduct.
Karakitsos, who according to his LinkedIn went on to run a prediction market platform called Assymetrix, dismissed the claims: 'I strongly disagree with the allegations and intend to respond through the legal process.'
Company attorney Robert Lynch told the New York Post: 'The unlawful actions of the prior CEO, Mr. Karakitsos, have forced the company to take this step.'
The structural failure here is the real story for founders.
When a single individual holds the CEO, director, and treasurer roles simultaneously — with sole control over every banking credential — there is no internal check that can catch a determined bad actor. Investors put in $8 million and received fabricated revenue figures in return. That is not a crypto problem or a startup problem; it is a governance problem.
Founders building with outside capital owe their investors — and themselves — basic controls: dual-signature authority on accounts above a threshold, read-only accounting access for the board, and a treasurer role that is never held by the same person writing the checks. The cost of setting that up is a few hours. The cost of skipping it, as Bitquery is now learning, is a lawsuit, a frozen company, and a leadership crisis that no new CEO hire can fully undo.
