The Battle for In-Game Assets of Bankrupt 'Crypto King'

An interesting court case is unfolding in Canada right now, where bankruptcy lawyers are currently battling to recover $30 million that a self-proclaimed "Crypto King" allegedly swindled from investors.

Aiden Pleterski was sensationally arrested in Canada last month amid allegations he ran a Ponzi scheme. While he had promised his victims returns of up to 7%, it's believed that he ended up investing just 1.6% of the cash he was entrusted — and instead spent millions of dollars on himself.

One of the latest motions put forward by Grant Thornton, which has now been approved by a judge, calls on Valve Corporation — which develops the Steam gaming platform — to freeze his accounts and hand over the login details.

Why? Because Pleterski has allegedly spent over $430,000 on in-game assets, including a collection of valuable virtual knives. Some of those transactions were said to be made as recently as March.

While Grant Thornton has repeatedly asked Pleterski to hand over the login details so these assets can be liquidated and returned to victims, the company's claimed that the 25-year-old has refused to cooperate and may be "using undisclosed digital assets to fund his lifestyle."

'Unresponsive and uncooperative'

While Pleterski has now been released on $100,000 bail, he has surrendered his passport and now faces tight restrictions. He's banned from owning a debit or credit card, as well as posting on social media about investments.

The court's decision to compel Steam to disclose his login details exposes an interesting dilemma for gaming companies — and dispels the myth that users truly own the assets they buy.

There's also been an extensive precedent for crypto exchanges and other Web3 companies to cooperate with law enforcement in freezing accounts and funds linked to criminal activity — with businesses in this nascent space perhaps fearful of regulatory repercussions if they don't. Local media reports suggest that Steam, for its part, has appeared unwilling to hand over Pleterski's logins voluntarily.

Firms in this industry also potentially face reputational damage among their users if they're seen to comply. As an example, trading platforms have faced blowback when it's emerged they were handing details about customers over to tax agencies.

As things stand, efforts to recoup Pleterski's assets continue at a glacial pace, with less than 10% of funds owed to creditors uncovered so far.

The fallen "Crypto King" will remain in bankruptcy proceedings unless he hands over login credentials for the accounts he has with Steam, Binance and other trading platforms; hands over $3.2 million, and catches up with his income tax liabilities.

Given his track record so far, all of this is unlikely to happen soon.