Arbitrade gained consent to own office block
Arbitrade was granted permission from the Bermuda Government as it acquired Victoria Hall, which is to be its global headquarters.
A subsidiary of the cryptocurrency exchange and coin company amalgamated with a local company and gained government clearance to take possession of the $6.5 million vacant office block on Victoria Street.
Arbitrade Properties (Victoria Hall) Ltd was incorporated in Bermuda in September. The following month it amalgamated with the 36-year-old Victoria Hall Company Ltd, a local company with 80 per cent Bermudian ownership.
The surviving entity from the amalgamation is also called Arbitrade Properties (Victoria Hall) Ltd, and it is a local company as defined by the Companies Act 1981, although it has no Bermudian owners. The two shareholders listed are Arbitrade founder Troy Hogg, a Canadian, and James Goldberg, an American.
Following government approval under section 104 of the Companies Act 1981, a section that deals with amalgamations, the company will own Victoria Hall, according to a document filed with the Registrar of Companies.
A memorandum of association document stated: “The company, with the consent of the Minister of Finance, has power to hold land in Bermuda not exceeding 0.1333 hectares.”
David Burt, the Premier, was also Minister of Finance at the time of the amalgamation on October 26. The lot size of Victoria Hall is 0.133 hectares.
The seven-storey office block was in darkness with no sign of activity yesterday. At the end of October, Len Schutzman, chairman of Arbitrade Ltd, said the building would house the company’s global head office digital asset exchange, and added: “Once its subsidiary, Arbitrade Exchange (Bermuda) Ltd, is licensed under the Digital Asset Business Act 2018, it intends to commence its hiring process, which will create numerous training and employment opportunities for Bermudians.”
Separately last month, Arbitrade stated it had “title” to 390,000 kilograms of gold bullion, worth $15.5 billion at yesterday’s market price. It intends to back five crypto tokens with the bullion. One of the tokens is called “dignity” and Arbitrade has said it will back each of the three billion dignity tokens with $1 worth of gold.
Arbitrade said that an independent public accounting firm had verified and confirmed a Safe Keeping Receipt “SKR” totalling 395,000 kgs of gold. It did not identify who had given it title to the gold, under what conditions, nor where the gold is or the name of the independent accounting firm.
When asked these questions, Alan Morrel, chief executive officer of The Creative Management Agency, said the information was commercially sensitive, and that Arbitrade was “legally bound by non-disclosure and privacy obligations and is not at liberty to disclose the information” with third parties.
The Creative Management Agency is US-based and is Arbitrade’s media partner.
Arbitrade has previously stated it will pay for the gold through cryptocurrency mining operations — using computer units to validate and process cryptocurrency transactions, and being rewarded for doing so with digital tokens. It also has plans to create a digital asset exchange.
There are 523 million of Arbitrade’s dignity tokens in circulation, according to the website CoinMarketCap. Dignity’s dollar value peaked at 29 cents in May, but has steadily declined to around one cent.
The wider cryptocurrency market has been hit by falling valuations during the past month. Bitcoin peaked at about $19,000 a year ago, but was trading at $3,900 yesterday. The price declines in the sector have been attributed to a number of factors, one being the US Securities and Exchange Commission imposing penalties on two operators who broke the law by selling unregistered securities through initial coin offerings.
Other reasons cited include reported declines in the sale of cryptocurrency equipment used for mining new digital coins, and a belief that some sellers are offloading a portion of their portfolio to minimise capital gain tax liabilities.
A number of Arbitrade companies are now incorporated in Bermuda. Arbitrade Properties (Victoria Hall) Ltd, which is 100 per cent owned by Arbitrade Property Holdings — a Bermuda exempt company — has its registered address at Trocan Management Ltd, Trott&Duncan Building, Brunswick Street.
The acquisition of Victoria Hall by Arbitrade, announced on October 31, was confirmed in a letter from law firm Trott&Duncan Limited on November 7.
Details of the change of ownership of Victoria Hall to Arbitrade did not appear on the computer system at the Land Title and Registration Office when The Royal Gazette checked yesterday. The updating of the details can take a number of weeks to complete, depending on how long the information takes to reach the land title office.
Arbitrade’s previous registered office was the upstairs floor of the former Skirt shop, in Grand Bend, Ontario.
In separate news, it was reported in the Exeter Lakeshore Times-Advance newspaper last month that Mr Hogg is the new owner of the 150-year-old Colonial Hotel in Grand Bend.
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