“The move of the Security Exchange Commission (SEC) and Ontario Securities Commission (OSC) to charge Arbitrade and its Ontario-based sister company Cryptobontix with operating a ‘pump and dump’ scheme is an unfortunate development.
“The principals of Arbitrade came to Bermuda pledging to get regulated under our then developing regulatory frameworks, as well as to fund and support various beneficial programs. Unfortunately, those pledges went unfulfilled, and they did not seriously pursue licensing under our regime once it became operational.
“It should be noted that their actual coin offering was made in Ontario by the sister company Cryptobontix and they did not conduct an offering or any digital asset business from Bermuda. Arbitrade formed a company, purchased a building and actively promoted their intent to get licensed.
“The company underwent and passed the same due diligence that any entity would undergo to form a company or purchase a building in Bermuda; the same due diligence which allowed them to form a company and purchase a hotel in Ontario.
“A string of companies expressed great interest in the developing regulatory framework, but ultimately they only wanted to promote their intent to get regulated while having had no serious intention of actually doing so; Arbitrade is one such company.
“Since that time, we have learned to leverage the strength of the regulatory frameworks we have developed and no longer entertain the bold pledges of companies that express an intent to get licensed but have not yet done so.
“We have turned a significant corner in the development and progression of our fintech industry and, as evidenced by the 16 licensed Digital Asset Businesses and seven (7) licensed Digital Asset Insurers, we have developed a stable of companies who have fulfilled their pledges to get regulated and are actively investing in Bermuda creating jobs for Bermudians.
“Should the principals behind Arbitrade be subject to a judgement or settlement that causes them to forfeit their assets, we pledge to work with the SEC and OSC to assist them in the recovery and sale of any such Bermuda assets such as Victoria Hall to ensure the proceeds are returned to the investors.”
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