Ontario's Crypto King will likely remain bankrupt until after criminal charges are resolved

Ontario's self-described Crypto King will likely remain bankrupt until criminal fraud and money laundering charges are resolved against the 25-year-old.

Justice William Black dismissed Aiden Pleterski's application for a discharge from his nearly two-year-long bankruptcy in a ruling released Thursday.

"Mr. Pleterski's conduct warrants an emphasis on public protection and accountability," wrote the Ontario Superior Court judge. 

"Refusing a discharge absolutely at this stage, pending the result of the criminal prosecution, would allow this court to take into account, in fashioning an appropriate remedy at that point, the outcome of the criminal proceedings."

Two months ago, Pleterski was charged with fraud and money laundering following an 18-month joint investigation between Durham Regional Police and the Ontario Securities Commission.

Police allege Pleterski solicited funds from investors, promising massive profits and guaranteeing no losses from their original investment. None of the charges have been tested in court.

In a bankruptcy discharge hearing Wednesday, lawyers for the trustee overseeing the bankruptcy for creditors, and for Pleterski, agreed that waiting on the outcome of Pleterski's criminal charges would make sense. But they disagreed on whether conditions previously imposed preventing him from applying for, or using, any form of unsecured credit should continue. 

Justice Black's decision acknowledged that it might be appropriate to revisit that prohibition at some point, but removing it right now would "cause the public to lose confidence in the bankruptcy regime."

"I would expect Mr. Pleterski to co-operate fully with the Trustee going forward, and to make full disclosure of all relevant facts," said the judge in his decision.

His ruling comes after a lawyer for the bankruptcy trustee said Pleterski has no remorse for his actions operating a Ponzi scheme and is continuing to cause his investors financial hardship by failing to co-operate with his bankruptcy proceeding, in the hearing Wednesday.

"Mr. Pleterski should be embarrassed and ashamed of his conduct, but he clearly is not, and this is precisely the reason he should not be granted a discharge," said Leanne Williams, counsel for the trustee, accounting firm Grant Thornton. 

"He has lied about his assets; he has lied about his income."

Bankruptcy proceedings are administered by a licensed trustee, who is responsible for investigating the finances of a person or business that has gone bankrupt and for administering their estate.

New court records filed by the trustee ahead of the bankruptcy discharge hearing alleged Pleterski continues to hide income connected to online gaming and other internet services — and has failed to provide any evidence of where millions of dollars worth of cryptocurrencies ended up.