Crypto firm Omega One to open Bermuda office
Omega One, an agency brokerage for cryptocurrencies, will open an office in Bermuda and has agreed to hire at least 20 Bermudians over the next three years.
The New York-based company will also donate 10 per cent of a planned token sale to philanthropic causes, with 10 per cent of that allocation going to sports and community clubs in Bermuda.
An agreement signed by Alex Gordon-Brander, chief executive officer of Omega One, and David Burt, the Premier, also involves the company collaborating with the Bermuda Government on developing a digital-asset custody union.
Omega One wants to work with insurers and the Government to help set up a business to securely hold and insure digital currencies on behalf of investors.
Bermuda has drafted legislation to create a regulatory and legal framework for digital-asset business as part of its fintech push. The House of Assembly has already approved rules to regulate initial coin offerings and a Digital Asset Business Act will follow soon.
Mr Gordon-Brander said the island was a logical place to set up insured custody services for increasing institutional investment, as it was a major global hub for the reinsurance industry and with a developed legal and technical infrastructure.
“All assets will be digital assets in a few years and we need an on-ramp where the current legal form of the assets can reside,” Mr Gordon-Brander told Bloomberg.
“Bermuda has an incredibly strong legal, technical, reputational jurisdiction for financial services in general, but particularly for custody of assets and reinsurance.”
He noted that the insurance and reinsurance industry on the island managed a huge amount of capital.
“Bermuda is to assets as New Zealand is to sheep,” Mr Gordon-Brander said. “The ratio of assets to population is about $8 million per inhabitant.”
Mr Burt said: “Bermuda as a country wants to be a centre of innovation. We have the infrastructure, we have an educated populace, and we will provide regulatory certitude for companies in this space.”
Omega One is the latest company to make commitments to the island, having been attracted by the island’s fintech drive.
Binance, the world’s largest cryptocurrency exchange, which is based in Malta, agreed to set up its compliance centre on the island, creating about 40 jobs, and pledged $15 million to the island for both educational purposes and for seed capital for young fintech businesses.
Last week at the Consensus fintech event in New York, blockchain company Shyft also signed a memorandum of understanding with the Government. Shyft pledged to invest up to $10 million in Bermuda over a three-year period, creating new jobs, helping to re-skill workers and investing in local businesses, education and infrastructure.
On Omega One’s website, Mr Gordon-Brander describes the company’s mission.
“We are building a bridge between traditional markets and digital assets, using world-class technology and trading algorithms,” the CEO said. “By improving liquidity and security in digital-asset trading, we are laying the groundwork for a more efficient, decentralised and inclusive financial system.
“Despite massive growth in crypto markets, exchanges remain illiquid, fragmented, costly to trade on, and open to theft by hacking. Omega One solves these problems by providing a decentralised automated execution system that trades across the world’s crypto exchanges.
“By radically increasing the liquidity of crypto markets, Omega One is laying the foundation for their maturation as an asset class and building the financial system of the future.”
Mr Gordon-Brander is one of the world’s leading designers of trading platforms, with a patent on the MarketAxess bond trading platform, on which $2 trillion has traded to date. He also managed portfolio construction applications and wrote the specifications for algorithmic trading at Bridgewater Associates, the world’s largest hedge fund.
Not everyone is convinced by cryptocurrencies. Michael Dunkley, the shadow national security minister, has expressed concern over the speed into which the Government is moving into blockchain and, in the House of Assembly, cited watchdog organisations as saying that 92 per cent of ICOs fail.
Last week the Wall Street Journal reported that in a review of documents produced for 1,450 digital coin offerings, it had found 271 with red flags, including plagiarised investor documents, promises of guaranteed returns and missing or fake executive teams.
However, the blockchain technology that underlies cryptocurrencies is seen as having huge potential to modernise industries that involve many intermediaries and cumbersome paperwork, such as shipping and healthcare administration.