Exposed by OffshoreAlert in 2019, Arbitrade perpetrated a cryptocurrency-based investment fraud that raised more than $40 million, with investors told their digital assets were backed by billions of dollars of gold that, in reality, did not exist. Despite the crude nature of Arbitrade's scheme and the fact that several of its principals had histories of lawsuits, judgments, tax liens, and involvement with prior scams, Bermuda Premier David Burt welcomed the company, claiming its operators had passed "enhanced due diligence" and "background checks". Burt's claims were difficult to take seriously given that Arbitrade’s principals included an undischarged bankrupt whose Trustee accused of perpetrating a $3.5 million Ponzi scheme against "friends" and "family”, a penny stock broker whose previous employers include six broker-dealers that U.S. regulators had expelled from the securities industry after committing fraud, and a Canadian concert promoter and multi-level marketer against whom eight judgments for more than C$372,000 had been entered in Ontario in 2008-2009 alone. Arbitrade morphed into Dignity Gold, with New York-based property developer Kent Swig among the principals. The new version of the scheme was given credibility by news outlets reporting - as though it were fact - that it was backed by “a minimum of $6 billion in gold reserves”, notwithstanding the fact that Swig was being sued at the time by JPMorgan Chase Bank over an allegedly unpaid credit card debt of $33,982 . Nearly two years after OffshoreAlert’s exposé, the assets of the scheme’s founder, Troy Hogg, were frozen by the Ontario Securities Commission as part of a fraud investigation into Arbitrade and Dignity.
In a legal action in which he is seeking $395 million in damages for an alleged fraud involving a cryptocurrency scheme, Canadian Troy Hogg claims two Americans "misappropriated" $250,000 he gave them in 2019 to try to obtain a bank license in Bermuda, OffshoreAlert can reveal.