Arbitrade’s chief operating officer Stephen Braverman has left the company and is leading a new business that owns the crypto tokens once controlled by Arbitrade.

Separately, a gold company in the US said it stopped doing business with Sion Trading FZE, a gold procurement agent for Arbitrade, very soon after the business arrangement was announced in December.

The future plans of Bermudian-registered Arbitrade, now bereft of what it thought were its crypto tokens, are unknown. During the past three months The Royal Gazette has made repeated attempts to contact Arbitrade, but has received no response.

Arbitrade’s former COO, Mr Braverman, is now president and chief executive officer of newly created Dignity Holdings LLC. Investment and real estate businessman Kent Swig is the chairman. He is president of New York-based Swig Equities LLC.

Dignity Holdings said that through its subsidiaries it had acquired Cryptobontix and its tokens. It intends to grow into “one of the largest, most stable global cryptocurrencies”.

The company and its subsidiaries are registered in Delaware, with offices in New York City, according to a July 25 statement.

There has been no update on Arbitrade’s future plans since January.

A year ago the cryptocurrency exchange and mining company said it would create hundreds of jobs on the island, that it had “title” to billions of dollars of gold bullion to back its crypto tokens, and that it would store bullion in Bermuda.

It acquired the seven-storey Victoria Hall office building, on Victoria Street, in October to be its global headquarters. However, ten months later the building remains unused and in darkness.

At the end of June its website was cleared of all information, including a list of officers and directors, and replaced with a “coming soon” message.

Arbitrade is still listed as active at Bermuda’s Registrar of Companies. The company does not have a licence to operate a digital asset business on the island.

Arbitrade lost control of Cryptobontix Inc and its family of crypto tokens in unusual circumstances. It was thought it had acquired Cryptobontix in March 2018, but in May this year it was announced that deal was never completed due to timing problems and regulatory approvals, and that Sion Trading FZE was to acquire Cryptobontix. That new deal was said to have been completed in June.

Arbitrade previously claimed it had “title” to 395,000 kilograms of gold bullion, which would be worth $18 billion at today’s market price, and that the bullion would be used to back its crypto tokens. It claimed that in partnership with Sion it had secured title to the gold through an SKR, or safe keeping receipt.

Arbitrade never revealed who had given it title to the gold and under what conditions, nor where the gold was, or the name of the “independent public accounting firm” that it said had verified the account.

The gold bullion SKR was to be transferred to United Arab Emirates-based Sion with its acquisition of Cryptobontix in June.

Four weeks later, the situation surrounding Cryptobontix changed again, according to the July 25 statement from Dignity Holdings that announced it had acquired Cryptobontix and its tokens.

It said its subsidiaries, Dignity Mining Group LLC and Dignity Gold LLC, had “acquired Cryptobontix, a family of tokens backed by Sion Trading FZE’s gold in Dubai”.

According to the company, Dignity Gold owns the crypto tokens called dignity, namaste, honor and orectic, and will “continue the relationship with Sion Trading FZE through the safe keeping receipt for 395,000 kilograms of gold in addition to the tokens”.

The Royal Gazette has reached out to Sion for comment on the development, and to Dignity Holdings for further information, but has not received any response.

In December, Sion announced it had secured a precious metals contract with Don David Gold Mexico to purchase “metal dore” from its Oaxaca Mining Unit. It planned to allocate precious metals, including those bought from Don David Gold Mexico “to further enhance Arbitrade’s existing gold assets”.

Don David Gold Mexico is a wholly owned subsidiary of Colorado-based Gold Resource Corporation. Gold Resource said it quickly ended its relationship with Sion due to “red flags” that included questionable procedures, weight confirmations and payment of invoices.

Max Barber, owner of Sion, disputed that and said it was his company that was unsatisfied with the weight and purity documentation for the gold provided by the mine.

In reply, Jason Reid, CEO and president of Gold Resource, said his company has been selling gold for years to reputable buyers in the industry without encountering any of the issues claimed by Sion. He said Gold Resource has since closed out the deal and terminated its relationship with Sion.