An office above what was once a small dress shop in a tiny beach community in Canada seems an unusual place to find a crypto company that is set to take over a seven-storey office block in Bermuda and be granted title to $10 billion of gold bullion in Dubai.
But the upstairs floor of the property that once housed the Skirt shop at 38 Main Street, Grand Bend, Ontario, is the given address for the headquarters of Arbitrade, which has said it will donate $1 million to the Bermuda Government. That donation was to have been made in the early part of last week.
Arbitrade’s office location in Grand Bend was a perplexing oddity to some who had looked it up on Google Maps and found the dress shop on the street view image. The company issued a statement to explain the situation. It said the original creator and owner of Arbitrade owned the large office above the shop and used the address as a temporary headquarters “until more suitable accommodations could be acquired”.
The statement on May 24, added: “Very shortly, Arbitrade will officially announce that it has placed an offer to purchase a seven-storey office tower in the country where the business will ultimately be domiciled. The new headquarters will house 360 employees and be the head office of operations.”
Speaking to The Royal Gazette on June 27, Len Schutzman, Arbitrade’s non-executive chairman, said the company had chosen Victoria Hall, on Victoria Street, for its global headquarters. At the time, the building was on the market for $6.5 million. The following day, Arbitrade founder Troy Hogg said the property deal was set to close during the following two weeks, with renovations to be carried out during the summer.
The Royal Gazette has taken a closer look at the company after it made bold statements regarding its ambitions for its future path as it establishes its global headquarters in Bermuda.
Arbitrade said it would donate $1 million to the Government to help pay for the refurbishment and launch of a fintech co-working incubator space in a Hamilton building. It has also expressed a desire to donate a further $125,000 to a variety of projects including the Mirrors programme, Family Centre, and two programmes that have not been announced by the Government — one an Alice programme for active shooter preparedness in schools and charities, the other a gang violence reduction proposal that is to include gang members being paid to work on chicken farms.
Arbitrade said it has incorporated in Bermuda, but as of Friday its name did not appear on the Bermuda Registrar of Companies website.
In its May statement to “followers, investors and token holders” that explained the Grand Bend office, Arbitrade also gave an explanation of how the purported multibillion bullion deal will work. It referred to acquiring $8.7 billion of bullion, comprising gold, silver, platinum and palladium, to back four crypto tokens. That total was subsequently increased to $10 billion to back five tokens, when Mr Hogg spoke during a telephone press conference on June 28.
In the earlier statement, Arbitrade explained: “This gold acquisition is similar to that of a house purchase and a mortgage. In a nutshell, the entities that are selling us the bullion are giving us title upon closing, meaning we own it like a person would if they purchased a house.
“Then they place a debt against said bullion under a structured financing over a certain period of time, which would be similar to a mortgage. Fifty per cent of the daily mined proceeds is applied to that debt. The only difference between a house mortgage and the Arbitrade bullion acquisition is that every day a certain amount of the bullion becomes wholly owned by the tokens each of the four bullion represents.
“This wholly owned bullion is what can be redeemed each year during the utility token swap period if desired.”
Arbitrade said last week that as the bullion debt is paid off the gold and other precious metal bullion will be shipped to a vault in Bermuda. It said it would take title of the bullion through what is called a SKR [safe-keeping receipt].
The Royal Gazette is attempting to establish secondary verification of the other company mentioned in the bullion deal, Sion Trading FZE of Dubai. The Dubai Gold and Commodities Exchange, where Sion is said to be a licensed gold trader, has not yet responded to an e-mail enquiry about the company.
During Arbitrade’s telephone press conference, where no questions were allowed, a man identified himself as being from Sion Trading and said its parent company was Scotia International in the US.
Scotia International of Nevada, based in Salt Lake City, Utah, has been identified by a number of people, including the Medium.com website, as the company mentioned. The Royal Gazette has phoned Scotia International and sent e-mails seeking verification that it has a subsidiary in Dubai, and that it has an agreement with Arbitrade. We are awaiting a response.
In its news update last week, Arbitrade said Mr Hogg was one of the first people to meet the Premier and ministers in charge of the fintech space, and that Arbitrade had made ten visits to the island. A question to Government to confirm the meetings and how many had taken place has not been answered. Mr Burt did post a message on Twitter at the end of May to say he had attended a presentation by Arbitrade at the Bermuda Underwater Exploration Institute.
Arbitrade said last week it is awaiting licences to operate in Bermuda, which “might take as long as September”.