CipherBlade founder accuses new management of asset misappropriation and fraud: Details

CipherBlade founder accuses new management of asset misappropriation and fraud:

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  • Richard Sanders, the founder of blockchain investigations firm CipherBlade, has filed a lawsuit in an Alaska district court accusing new management of stealing company assets and confidential information while he was volunteering in Ukraine.
  • The defendants, including Manuel Kriz and Michael Krause, allegedly misled Sanders to gain email access, diverted clients to new entities in Alaska and Singapore, and even removed business documents from Sanders’ home.
  • While CipherBlade’s new management disputes the allegations and claims Sanders voluntarily withdrew from the company, both parties are now preparing to prove their respective cases in court.

Richard Sanders, the founder of Pennsylvania-based blockchain investigations firm CipherBlade, has filed a lawsuit claiming misappropriation of company assets, fraudulent activities, and even theft from his home. The legal proceedings, initiated in an Alaska District Court, come in the wake of Sanders’ absence from the United States. During this period, he volunteered in Ukraine, aiding local authorities with cryptocurrency-related investigations.

Sanders founded CipherBlade in 2019 with the objective of assisting federal agencies, private firms, and individuals in financial crime investigations, particularly cybercrime. However, according to the filed complaint, the firm’s internal operations have been compromised. It alleges that Defendants in the lawsuit took advantage of Sanders’ absence to seize control of company assets and sensitive data. Additionally, the suit states that Sanders’ home was broken into and essential documents were stolen.

Trust betrayed amid international commitments

While Sanders was abroad, Manuel Kriz and Michael Krause, two of the named defendants, purportedly misled him to gain access to his email accounts. Sanders granted them access under the impression that it would be used for regular client engagements. However, the defendants allegedly used this access for far more nefarious activities, including the redirection of CipherBlade’s client base to new entities based in Alaska and Singapore.

The defendants didn’t stop at digital assets. Sanders, who had been alerted by his home security system about suspicious activities, returned home to find business registration documents and other critical papers missing. Moreover, a package had been fraudulently sent from his home to an address in Cyprus using his name and credit card information. Sanders severed his ties with CipherBlade and took to LinkedIn to warn the public, stating he has “zero involvement” with the firm now.

Meanwhile, CipherBlade’s current management has robustly disputed the allegations. They assert that Sanders had already ceased active participation in the company by early 2023. They stated that Sanders’ claims are “baseless, vexatious, and motivated by personal animosity,” and pledged to address them in due course through legal channels.

Sanders announced on LinkedIn on Monday that he had no choice but to sever ties.

On Monday afternoon, CipherBlade responded to Sanders’ allegations in a LinkedIn post. The firm clarified that Sanders was never an owner and mentioned that he stopped participating actively in CipherBlade’s operations since 2022. In early 2023, Sanders moved to Ukraine to pursue his pro-bono mission, and since then, he has effectively ceased to participate in CipherBlade’s operations.

Paul Sibenik, former senior investigator at CipherBlade, and Sanders’ chosen successor, has come forward supporting the lawsuit’s contentions. He emphasized that the firm’s integrity is at stake and stated that the new CipherBlade doesn’t represent the values Sanders originally built the firm on. Moreover, he clarified that nearly all of the original senior investigators have left, raising questions about the expertise of the current team.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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