Gold, silver, platinum and palladium bullion will be shipped to Bermuda and held in a vault to back a number of crypto tokens, according to Arbitrade.

The cryptocurrency exchange and coin company, which is setting up its global headquarters in Bermuda, has given further details about a purported deal to acquire title to $10 billion in gold bullion. The bullion will be used to back five crypto tokens with a variety of precious metals. The tokens are Dignity, Namaste, Oretic, Honor, and the Arbitrade ICO token.

In a telephone press conference last Thursday, Arbitrade’s founder Troy Hogg expressed a desire to support a number of unconfirmed Bermuda government projects, ranging from chicken farms employing gang members to an active shooter preparedness programme for schools and charities.

He also said it was donating $1 million to the Government to help pay for the refurbishment and launch of a fintech co-working incubator space in a Hamilton building.

In an updated news release yesterday it added details about its plans, including the $10 billion gold bullion deal.

“Arbitrade Ltd has made a definitive deal with Sion Trading FZE Dubai to acquire $10,000,000,000 in gold bullion. The bullion will be held at Brinks’ vault at the Dubai Gold Exchange. Arbitrade will have the title certificate, which is called an SKR, in hand in the next two weeks,” the company said in a statement credited to the “Arbitrade Team”.

“The company will have the bullion audited by a major accounting firm that operates in both (sic) Bermuda, Dubai and the United States before the end of September or as the accounting firm’s schedule permits. The audit is not an important factor and is only being done to satisfy US regulators.”

The company outlined how the gold bullion will be divided up to provide backing in gold, silver, platinum and palladium, for its tokens.

“As Arbitrade pays off the gold bullion debt to Sion, the gold can be traded for the appropriate metals backing each token before being shipped to the vault in Bermuda, where it will be audited once a year, again, as the reserves build up,” the Arbitrade Team said.

The company said it had been told that it may take until September for it to receive licences to operate in Bermuda and launch an initial coin offering, with the delay being due to “regulatory issues”.

In the meantime, it will oversee the buildout and upgrades to Victoria Hall, the seven-storey office block on Victoria Street that is to be its headquarters. Arbitrade has said the purchase of the building, on the market for $6.5 million, is expected to be completed in the next two weeks.

Michael Dunkley, the former Premier who is now Shadow Minister for National Security, yesterday raised concerns about press comments made by Arbitrade, particularly regarding the unconfirmed government initiatives and the $1 million donation. He also questioned Government’s silence on Arbitrade’s comments, the decision by Mr Hogg to open his presentation by defending himself against social media and online attacks, and the conference ending with no questions being allowed.

In yesterday’s update, Arbitrade said its representatives had made ten visits to Bermuda, with Mr Hogg being “one of the very first people that met with the Premier and ministers in charge of the new fintech space”.

Arbitrade said its partnerships and agreements require approvals from all partners and the Government “before we can release anything”. It apologised for its “rushed” press conference on June 28. Included was a photograph of Arbitrade’s directors in a meeting held at the Hamilton Princess, along with pictures of an Arbitrade event at Elbow Beach.

In a list of questions and answers printed at the end of the update, one unattributed question asked why Arbitrade did not show up on a list of registered businesses in Bermuda. The company replied: “It should show up on the registry as Arbitrade Ltd, now. If it doesn’t, it will soon.”

As of yesterday, Arbitrade did not feature on the Bermuda Registrar of Companies website.

In a statement that arrived too late to appear in yesterday’s print edition, a government spokesman responded to Royal Gazette questions about Arbitrade. However, the statement did not mention the company by name, nor did it address any of the firm’s specific claims, such as the Alice programme [active shooter preparedness] or any plans for gang members to be paid to work on a chicken farm.

The statement said: “The Fintech Development Fund was passed in the Senate today. When the fund is set up and contributions can be received, the Government will make such contributions public.

“We are pleased that companies are looking to set up in Bermuda, planning to invest in building our fintech industry and supporting community initiatives.

“The same way insurers assisted with developing our insurance industry while supporting community organisations over the years.”