Bitquery Inc. is a blockchain data company focused on tracking the value of crypto assets and the flow of funds, but has now filed a lawsuit against its co-founder and former CEO Dionysios “Dean” Karakitsos in the New York Manhattan Supreme Court. The complaint alleges that since an investment of approximately $8 million was injected in 2022, a portion of company funds has been continuously transferred to his personal accounts and multiple entities he controls over several years, with the amount in question exceeding $5 million; Bitquery also claims that to cover up the purpose of the funds, the former CEO deleted 194 records of expenses. As the plaintiff, the company is demanding the return of at least $5 million, payment of legal fees, and the return of all company bank documents in this civil lawsuit, which means that a technology service provider specializing in on-chain fund tracking has become embroiled in a scrutiny of fund flows led by traditional courts. For the crypto data industry, this is not only a governance conflict between the founder and the company but also a public warning about how single-point account control, lack of independent audits, and arbitrary deletion of records can be viewed as high-risk behaviors at a judicial level. This lawsuit has become a notable risk sample illustrating the tightening boundaries of internal governance and fund compliance for crypto data companies.

Bitquery's Exclusive Control and the $5 Million Missing Allegation

In the narrative of the lawsuit, "exclusive control of the company bank accounts" is the starting point of the entire dispute. Since 2022, investors injected approximately $8 million into Bitquery, marking the official entering of the company into an expansion phase after fundraising. However, reports claim that during this time the former CEO had single-point control over the company accounts, with all fund movements revolving around him alone. In the absence of a co-signing system and independent audits, this control structure provided both technical and procedural convenience for the subsequent annual fund transfers: Bitquery accuses him of transferring company funds directly to personal accounts and multiple entities he controls over several years while deleting 194 expense records to make the funds “disappear” from the company’s financial view. From a regulatory and judicial perspective, such highly concentrated and opaque account powers inherently constitute the institutional premise for the courts to have reason to intervene in the review of company fund flows.

Surrounding the amount in question of over $5 million, the lawsuit sketches another main line of conflict: on one hand, the company claims that funds went missing during the former CEO's control while on the other hand, it has filed a civil lawsuit in the New York Manhattan Supreme Court, demanding the return of at least $5 million and payment of legal fees, as well as the return of all company bank documents. The first two requests directly point to "filling the diverted hole" and bearing litigation costs, while the last aspect touches upon deeper compliance implications—the bank documents are not only key evidence in reconstructing fund flows but also the foundational documents for restoring the company’s legitimate control over the accounts. For a data company focused on tracking the flow of crypto assets, being forced to apply to a traditional court to regain its bank documents and account evidence signifies an acknowledgment, at a practical level, that internal controls have failed and formally puts the question of how governance structures allocate account powers into the shared scrutiny of judicial and industry compliance.

The Cost of Single-Point Control: Governance Loopholes in Crypto Startups

Bitquery's lawsuit in New York has put the “default setting” of many crypto infrastructure companies on trial: where the founder or former CEO solely holds control over the company accounts. In this enterprise that specializes in tracking on-chain fund flows, reports indicate that Dionysios "Dean" Karakitsos has had exclusive control over the company accounts for an extended period after the investors injected around $8 million in 2022, lacking significant permission levels and visible internal checks and balances. It is under this governance pattern that Bitquery accuses him of consistently transferring company funds into personal accounts and multiple entities he controls over several years, as well as deleting 194 expense records to cover the use of those funds. For a data company, this presents not only a case of alleged misappropriation but also a direct circumvention of governance structures, allowing fund security to devolve from a shared responsibility of the team and the board to a bet on one individual’s self-discipline.

From the investor’s perspective, such structures often form during the “trust inertia period” after funds are in place: Money is deposited into company accounts, perceived as a completed transaction, while issues like who holds the online banking keys, who can unilaterally issue transfer instructions, and how the board is informed of significant expenditures are not codified into executable supervisory mechanisms. Bitquery’s timeline is very focused—from the investment completion in 2022 to the lawsuit filed in 2025, it is when governance arrangements should be gradually maturing, yet it has been pointed out as the window period for the continued operation of single-point control. In contrast, a more robust approach within the industry has become relatively clear: multi-signature accounts prevent any individual from unilaterally diverting company funds, significant fund operations require board or authorized governance body approval, and independent financial audits periodically check accounts and original documents, exposing actions like “deleting records” to external professional review. The reason the Bitquery case has triggered strong reflection within the industry is precisely that it demonstrates how the absence of these conventional defenses can turn a legitimate fundraising effort into a compliance incident sample under a high-risk governance structure over a few years.

Data Company Deletes Records: Legal Risks from 194 Missing Entries

If single-point account control merely lays the groundwork for hidden dangers, then Bitquery’s accusations that the former CEO deleted 194 expense records bring internal governance issues directly into the courtroom spotlight. According to the complaint, these records should have reflected normal company expenses but were cleared during the years when funds flowed from the company accounts to personal and affiliated entities, allegedly aimed at covering up the whereabouts of over $5 million. For a blockchain data company whose core business is tracking fund flows, to “delete their own accounts” is not just a moral irony, it is also a backlash against brand commitments and compliance narratives: clients rely on its complete visibility of others' fund movements, while this lawsuit in New York questions whether it can clarify where its own money went.

In U.S. civil judicial practice, such alterations are no longer merely an internal management issue but are examined under the framework of “evidence spoliation.” Once the court determines that there is intentional destruction or alteration of records related to the core dispute, the jury may be allowed to make unfavorable inferences—such as presuming that the records deleted were extremely detrimental to the party that deleted them—while judges can impose procedural sanctions that can range from limiting defenses to increasing cost burdens, which directly changes the balance of power in the litigation. For on-chain data service providers like Bitquery, the disappearance of 194 expense records not only affects the course of this case in the New York Manhattan Supreme Court but establishes a clear signal at the industry level: within the jurisdiction extended by traditional courts, any attempts to obscure fund trajectories by deleting records will be seen as a betrayal of data integrity, transforming into a long-term risk to the company’s reputation and compliance boundaries.

Investors, Boards, and Risk Control: How the Industry Will Catch Up

For crypto data and infrastructure companies, the story of Bitquery serves as a warning from the shareholders' perspective. Since 2022, approximately $8 million in funds were injected into the company, yet under the “exclusive control” structure pointed out by reports, the funds remained concentrated in the company accounts under the unilateral control of the former CEO, meaning investors essentially handed over both capital and voice to one individual. Once the funds are accused of continuously transferring to personal accounts and entities under his control, along with the allegation of 194 expense records being deleted, the ability of shareholders to initiate internal investigations, freeze authorities, and push the board to defend their rights becomes a critical divide affecting whether they can truly enjoy judicial protection and governance dividends.

The board is forced to confront its fiduciary duties in this dispute: deciding who controls the bank documents, whether to require external custody or multi-signatures, and whether to set approval thresholds and record-keeping mechanisms will all be restated as reviewable decision chains in the civil lawsuit in the New York Manhattan Supreme Court. Bitquery’s request for the return of at least $5 million and all company bank documents essentially forces the company governance back to a more stable combination of “permissions separation, fund custody, compliance officer + external audit” through the traditional judicial system. More companies within the industry are beginning to introduce dedicated compliance officers and regular external audits, with the Bitquery case providing a highly persuasive negative example: when an on-chain data service provider falters in internal fund management and evidence retention, U.S. courts will not only extend jurisdiction but also inform global investors through the progression of the case that the prerequisite for protection pathways is that the company must first complete the “mandatory course” of basic risk control and board oversight, which will become an important reference point for investors and boards reshaping the governance landscape of crypto data companies in the coming years.

The Next Stop for Compliance of Crypto Data Companies Under the Bitquery Lawsuit

Bitquery suing its former CEO in the New York Manhattan Supreme Court, with the timeline from the lawsuit filed in June 2025 to the CEO's resignation in October overlapping, is itself redrawing the compliance boundaries of crypto data companies: the three major pain points of single-point control, opaque fund flows, and record deletions are being prominently displayed, sending the signal to the industry that no matter how “technological” on-chain business operations may be, as long as company accounts and fund management fall within the purview of traditional courts, internal governance must be designed according to judicial review standards. The problem is that as of 2026, public reports still have not disclosed the details and final judgment of this case, making the Bitquery case temporarily a list of high-risk scenarios rather than a “standard answer” that all companies can replicate. Regulators, investors, and project parties are using this as a rehearsal: in the coming years, structural arrangements where a single executive holds all company accounts will be systemically questioned, multi-authorizations, board-level financial oversight, traceable expense records, and log retention will become hard options for financing and due diligence. As global regulation extends from licenses and taxation to company internal governance, if crypto data companies cannot actively tighten account control and evidence retention, they will have to passively accept the costs of rule rewriting in similar cases as Bitquery.

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