Trader appeals to Burt over fintech deal

  • High standard of requirements: Denis Pitcher, left, a technical consultant with the Fintech Business Unit, and David Burt, the Premier (File photograph)

    High standard of requirements: Denis Pitcher, left, a technical consultant with the Fintech Business Unit, and David Burt, the Premier (File photograph)


A spice trader who invested in an Arbitrade cryptocurrency token wrote to the Premier seeking assurances about the company’s operations in Bermuda after it “disappeared on” backers earlier this year.

Zach Bobker, a managing partner of online delivery service My Spice Sage, told David Burt he feared the firm could be “inappropriately trading on a false relationship” with the island. He said in an e-mail to Mr Burt that he had invested in dignity, or Dig, since February 2018 and had followed Bermuda’s emerging fintech industry.

Mr Bobker said he had listened to more than 200 hours of Bermuda Parliament sessions and was “impressed”.

He wrote: “I reach out because of the strange situation Dig/Arbitrade investors are currently in. The few of us remaining that is.

“Arbitrade has been trading on their relationship with Bermuda since last year.”

Mr Bobker added: “Unfortunately, the company has gone completely quiet since January.

“It is impossible to get a response from anyone at the company.”

He said: “I know this isn’t your problem and I’m not trying to make it your problem, as I know listening to Bermuda Parliament you have much more pressing matters at hand.

“However, given that Arbitrade has traded on the Bermuda name for close to a year now, I was hoping you can clarify if they are in fact working with Bermuda and are still in operation in your country.

“Or if you can’t speak directly on the matter perhaps you can gently encourage Arbitrade to get in touch with their token holders. I would imagine Bermuda does not want companies falsely capitalising on the Bermuda name, especially in this emerging space.

“They have completely disappeared on us token holders since January.

“If they are inappropriately trading on a false relationship with Bermuda, this would be important for us remaining token holders to know so we can both move on with our investment lives and also pursue any appropriate legal remedy.”

The e-mail was among Arbitrade-related correspondence released to The Royal Gazette by the Government after a public access to information request.

Denis Pitcher, a technical consultant in Bermuda’s fintech business unit, forwarded the e-mail to Jane Walker, a senior lawyer at legal firm Trott & Duncan, which acts for Arbitrade.

He told her his official position was not to disclose the status of applications to protect the privacy of companies.

Mr Pitcher wrote on April 1: “Arbitrade at this time have not been granted a licence either to launch an ICO in Bermuda or conduct digital asset business in Bermuda.”

Mr Pitcher added that getting a licence could take some time and that Omega One, an agency brokerage for cryptocurrencies, had acquired one only two weeks before after it signed a memorandum of understanding in May last year. He pointed out that was “testament to the high standard of requirements”.

Ms Walker said Mr Bobker’s inquiry was not the first and revealed that Mr Burt and Wayne Caines, the Minister of National Security, who had responsibility for fintech at the time, had earlier recommended that public statements about Arbitrade should be limited.

She wrote: “As with the Government’s policy of non-disclosure in relation to the status of applications other than to regulators or the Government as required we advise our clients [on the advisement of the Premier and minister Caines some months ago] keep all statements in relation to the company to a minimum.”

Mr Bobker received an e-mail reply from Wayne Smith, the head of the fintech business unit, on April 8, who also said that Arbitrade had not been granted a licence either to launch an initial coin offering or to conduct digital asset business in Bermuda.

He added that the company had “successfully passed the vetting process” for permission to buy Victoria Hall, its intended global headquarters on Victoria Street, Hamilton.

Mr Smith said: “However, they are not permitted to operate their business from the premises until they have obtained the appropriate licences.

“We do note that Arbitrade lists on their website that Victoria Hall is the home of their future office, not their current office.”

A government spokeswoman said the Bermuda Monetary Authority should be contacted for information on digital asset business licences. Omega One is the only DAB licence-holder listed on the BMA website.

The Gazette e-mailed senior Arbitrade figures for comment, but there was no response.

To view the Pati request and response, click on the PDF links under “Related Media”

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Published May 6, 2019 at 8:00 am (Updated May 6, 2019 at 6:31 am)

Trader appeals to Burt over fintech deal

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