Created: Jul 29, 2025 07:00 AM (Updated: Jul 29, 2025 12:57 PM)
In 2019, Arbitrade released these photographs showing gold bars it said it purchased to back its cryptocurrency (Photograph supplied)
A long-awaited cryptocurrency fraud trial tied to Bermudian-based Arbitrade Ltd scheduled to open in a Miami federal court yesterday has been rescheduled to October 20. The delay comes after a flurry of nearly 100 new pretrial filings from all parties, including multiple outstanding motions and a lack of consensus on pretrial stipulation, according to a filing provided by the US Securities and Exchange Commission.
The trial marks a significant development in a case that once promised to boost Bermuda’s status as a global fintech hub.
The SEC alleges that Arbitrade and its Canadian affiliate, Cryptobontix, along with four executives, orchestrated a $37 million “pump-and-dump” scheme involving the Dignity token. Central to the SEC’s case is a claim that the companies falsely announced they had acquired $10 billion in gold bullion to back the cryptocurrency, misleading investors worldwide, including in the United States and Bermuda.
Between 2018 and 2019, Arbitrade “issued announcements falsely claiming it had received title to gold bullion” and that each Dig token would be backed by $1 in gold, the SEC said in its complaint. The regulator alleges that this claim was a fabrication designed to inflate the value of the token so that executives could sell their holdings at a profit.
The defendants include Arbitrade founders Troy Hogg and James Goldberg, along with Stephen Braverman and Max Barber. They deny the charges.
Arbitrade set up shop in Bermuda in 2018, vowing to create hundreds of jobs, purchasing Victoria Hall for $6.5 million in a plan to turn it into the company’s global headquarters. The promises fell apart under international scrutiny. The Ontario Securities Commission later ruled against Arbitrade and related entities for fraud and unregistered trading.
The case has also drawn attention locally, as defence lawyers previously requested that Bermudian-based witnesses be granted anonymity, citing fears of reputational damage because of extensive media coverage.
The trial is expected to last several weeks. The SEC is seeking permanent bans, penalties and disgorgement of profits from the defendants.
• For the full US Securities and Exchange Commission complaint, see Related Media
• It is The Royal Gazette’s policy not to allow comments on stories regarding court cases. As we are legally liable for any libellous or defamatory comments made on our website, this move is for our protection as well as that of our readers
• UPDATE: this article has been updated to show that the trial has been rescheduled, based on new information provided by the SEC
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