An Ontario judge has ordered the developers of popular video game platform Steam to freeze the accounts of Ontario's so-called “crypto kings” and prevent them from trading or cashing out their assets.
After a court hearing on Thursday, Ontario Superior Court Justice Black signed an order issued by bankruptcy trustee Grant Thornton to Valve, requiring the company to provide the trustee with all information relating to the 25-year-old man's Steam account.
The trial came two weeks after bankruptcy filings revealed that Pretelski transferred more than $500,000 in a series of transactions on the video game platform, including the sale of valuable in-game items known as skins (specifically virtual knives) that players could redeem for real money or in-game currency.
According to court documents, the trustee repeatedly asked Pretelski and Steam for access to those accounts but was denied access.
The trustee also sought a two-year extension of Pretelski's bankruptcy proceedings, which began in August 2022, in response to what Pretelski described in court documents filed Thursday as a “catch me if you can” tactic.
Nearly two years after the 25-year-old filed for bankruptcy, the trustee calculated that he has only recovered about 18.5 percent of the money invested in him.
During that time, Pretelski had not turned over some of his assets (such as a Jacob & Co. Astronomia Casino watch that was worth more than $360,000 when he purchased it) and had paid for months of world travel with undisclosed Sheen+Points, creating a situation that the trustee classified as “exceptional,” the documents show.
“It's clear that bankruptcy will not allow for full recovery of losses,” said Norman Groot, a fraud recovery lawyer representing investors.
Groot said six of Pretelski's clients plan to file new civil lawsuits soon, lawsuits that could haunt Pretelski for the rest of his life.
“Civil judgments for fraud can last a lifetime if a bankruptcy is declared. Mr. Pretelski is a young man with plenty of time to work toward recovery,” Groot said.
Pretelski did not appear to attend the online hearing, but his lawyer, Michael Shimahn, asked for more time to respond to the bankruptcy trustee's request to postpone the bankruptcy.
Pretelski, who is due to make his first court appearance next week, faces criminal charges of fraud and money laundering but has “limited capacity” to deal with bankruptcy matters, he noted.
“There are a lot of allegations coming forward and he needs to speak out in front of you all,” Simaan said.
Judge Black gave Pretelski more than a month to respond, but imposed two conditions: he is permanently barred from holding a credit card and from soliciting or marketing to investors, and he must provide login information for his Steam and Binance accounts.
The trustee also recommended that Pretelski's final discharge, the final stage of the bankruptcy proceedings, be contingent on him paying $4.5 million for allegedly unaccounted assets.
