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‘Crypto King’ associate sentenced to 5 months in jail for contempt

An associate of Ontario’s self-described Crypto King was sentenced to five months in jail for contempt of court in Oshawa, Ont. Friday.

The sentence stems from a lawsuit against Colin Murphy, 27, filed by an investor trying to recover $120,000 given to Murphy to invest in ‘Crypto King’ Aiden Pleterski’s cryptocurrency investment operation. 

Murphy was found in contempt by Ontario Superior Court Justice Hugh O’Connell for refusing to surrender his iPhone while an Anton Piller order, a kind of civil search warrant, was executed against him early last year and for deleting data on the phone afterward. 

At the time, Murphy told CBC Toronto he deleted data because he keeps “super sensitive stuff” on the phone concerning his girlfriend. Since then, Murphy’s refused to disclose where the data he removed from his iPhone was preserved.

“He’s put himself behind bars, I haven’t done it,” said Justice O’Connell while delivering Murphy’s sentence on Friday.

“Although I’m forcing it, his actions have to require a large wake up call.”

Norman Groot, the lawyer representing the investor suing Murphy, had originally asked for a four to 12 month jail sentence in submissions for the contempt sentencing last fall. 

Judge orders liquidation of Porsche, truck, guns

In November, Justice O’Connell issued a default judgment against Murphy for fraud and breach of fiduciary duty. The judge ordered Murphy to pay $120,000 in liquidated damages by surrendering his 2017 Porsche 9TS, 2020 Ford F250 and firearms for liquidation and sale.

Four guns laying on the ground.
Colin Murphy was ordered to surrender his firearms for liquidation as part of a default judgment issued against him in this case in November 2023. (Plaintiff’s Factum filed in Ontario Superior Court)

An auction is expected to take place later this month to sell Murphy’s vehicles, according to court filings, but Groot said in court that Murphy has not yet handed over his guns, which he was supposed to this week. O’Connell cited the failure to hand over the guns as an aggravating factor in the sentencing. 

A Lamborghini Murphy purchased and registered in his grandfather’s name is still unaccounted for. Although, Murphy previously told the court he took the luxury car to Las Vegas in September 2022 and sold it there.

Murphy invested $415,000, mostly an early inheritance from his grandfather, with Pleterski in the fall of 2020 and got the funds back by March 2021. From there, others — like the investors now suing Murphy — started providing Murphy money to invest with Pleterski.

A red Porsche luxury car.
A judge ordered Colin Murphy to surrender this 2017 Porsche 9TS and a 2020 Ford F250 registered in his name for liquidation as part of a default judgment against him. (ECC Tuned/Facebook)

Despite getting back his investment, Pleterski continued to transfer Murphy large sums of money in cash and drafts, according to court records. The filings point to bank records showing Murphy receiving deposits of up to $200,000 at a time. At least one of those $200,000 deposits in November 2021 was used to pay off Murphy’s credit cards, according to bank records and Murphy’s testimony.

For his part, Murphy estimates he received $500,000 from investors but said he has no records of what he transferred Pleterski or what Pleterski transferred him, according to court filings. 

Pleterski’s bankruptcy proceeding determined Murphy received $1.3 million from Pleterski, and, as of the trustee’s last report in October, still owed $900,000 of that to Pleterski’s estate for creditors.

‘Crypto King’ investors trying to recoup $40M

For nearly a year and a half now Pleterski’s investors have been trying to track down more than $40 million they gave him. A Toronto-based bankruptcy proceeding has recovered about $3 million for roughly 160 investors. 

The bankruptcy investigation found that Pleterski only invested about two per cent of investor funds while spending nearly $16 million on himself — renting private jets, going on vacations, adding luxury cars to his collection and leasing a lakefront mansion prior to his bankruptcy.

A young man sits in the seat of a private jet looking at his phone.
Ontario’s self-proclaimed ‘Crypto King’ Aiden Pleterski only invested about 2% of investor funds while spending nearly $16 million on himself, which included renting private jets, according to his bankruptcy proceeding. (aiden_pletersik/Instagram)

While the bankruptcy proceeding is ongoing, it is the only legal avenue investors have to recover their funds from Pleterski. 

In Murphy’s civil case, Groot obtained a court order to seize Murphy’s passport, along with freezing orders and civil search warrants to search locations connected to Murphy without warning. It was Murphy’s conduct during the execution of one of those civil search warrants that led him to be found in contempt of court. 

Groot said he’s still working to track down the data wiped from Murphy’s phone.

“The data will tell us who he’s talking to, where they’re moving money, who else hes dealing with,” Groot told reporters outside court on Friday. 

$1M bank drafts already deposited

That same search warrant also led to the recovery of more than $1 million in bank drafts to Pleterski, data Murphy claims comes from Pleterski’s iCloud account, and Murphy’s two cell phones in January 2023. 

WATCH | Murphy speaks about wiping iPhone and sharing data outside of court last year:

‘Crypto King’ associate explains why he wiped cellphone, handed over data

12 months ago

Duration 0:36

Colin Murphy, who raised money for self-described “Crypto King” Aiden Pleterksi’s investment operation, explains why he wiped his cellphone before handing it, and other data, over as part of a court order outside of the Oshawa, Ont., courthouse.

The bank drafts have since been handed over to Pleterski’s bankruptcy proceeding, which determined the drafts had no value because they’d previously been deposited electronically.

Murphy is required to surrender himself by Feb. 8 to begin serving his five month sentence. 

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