SEC v. ARBITRADE LTD; CRYPTOBONTIX INC; TROY R.J. HOGG; JAMES L. GOLDBERG; STEPHEN L. BRAVERMAN; and AND MAX W. BARBER, No. 1:22-cv-23171, Southern District of Florida (Sept. 30, 2022)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO.: _____________

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

ARBITRADE LTD.,
CRYPTOBONTIX INC.,
TROY R.J. HOGG,
JAMES L. GOLDBERG,
STEPHEN L. BRAVERMAN, and
MAX W. BARBER,

Defendants, and

SION TRADING FZE,

Relief Defendant.

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF
AND DEMAND FOR JURY TRIAL

Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
I. INTRODUCTION
1. The  Commission  brings  this  action  as  a  result  of  a  crypto  asset  pump-and-dump
scheme perpetrated by Arbitrade Ltd. (“Arbitrade”), a Bermudan company, and Cryptobontix Inc.
(“Cryptobontix”), a Canadian company, and their principals, Troy R. J. Hogg (“Hogg”), James L.
Goldberg (“Goldberg”), and Stephen L. Braverman (“Braverman”), and a so-called international
gold trader, Max W. Barber (“Barber”).  The misconduct involved in this matter centered on an

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Ethereum-based
1
  crypto  asset  that  Arbitrade  and  Cryptobontix  owned  and  controlled  called
“Dignity”  or  “DIG,”  which  was  traded  exclusively  on  a  crypto  asset-trading  platform  called
Livecoin.
2. Although this case involves crypto assets, it bears the hallmarks of a classic pump
and dump scheme.
3. Between May 2018 and January 2019, Arbitrade and Cryptobontix, through Hogg,
Goldberg, Braverman, and Barber,  made material misrepresentations and omissions to investors
while they were offering and selling DIG in a series of news and press releases issued to the public
and a press conference.  They also participated in a scheme to defraud.  Among other things, the
releases falsely claimed that Arbitrade had acquired and received title to $10 billion in gold bullion
and intended to back each DIG token issued and sold to investors with $1.00 worth of this gold.
Arbitrade claimed to have acquired the gold through a purchase transaction with Barber and his
company, SION Trading FZE (“SION”).  The Defendants also misrepresented that independent
accounting firms had performed an “audit” of the gold and verified its existence.  In reality, the
gold acquisition transaction with Barber and SION was a sham.
4. Arbitrade  and  Cryptobontix,  through  Hogg,  Goldberg,  and  Braverman,  used  the
false and misleading releases and press conference to generate demand for DIG on the Livecoin
trading platform.  The fraudulent releases had a material impact on the price of DIG sales on this
trading  platform.    Simultaneous  with  Arbitrade  and  Cryptobontix  conducting  the fraudulent
promotional campaign, Hogg and Goldberg, with Braverman’s assistance, sold DIG tokens on the

1
  Ethereum describes  itself  as  a  technology  for  building  apps  and  organizations,  holding  assets,
transacting and communicating without being controlled by a central authority.  It supports smart
contracts, which digitize agreements by turning the terms of an agreement into computer code that
automatically executes when the contract terms are met.

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Livecoin trading platform at artificially inflated prices, which resulted in proceeds totaling about
$36.8 million.
5. As a result of the conduct alleged in this Complaint:
a. Arbitrade, Cryptobontix, Hogg, and Goldberg violated Sections 5(a) and (c)
of the Securities Act of 1933 (“Securities Act”) [ 15 U.S.C. § 77e(a) and (c)];
b. Hogg and Goldberg violated Sections 17(a)(1), (2), and (3) of the Securities
Act [15 U.S.C. § 77q(a)(1), (2), and (3)]; and
c. Arbitrade,  Cryptobontix,  Hogg,  and  Goldberg  violated  Section  10(b)  [15
U.S.C. § 78(j)(b)], and Rules 10b-5(a), (b), and (c) [17 C.F.R. § 240.10b-5(a), (b), and (c)] of the
Securities Exchange Act of 1934 (“Exchange Act”).
d. Hogg is liable as a control person under Section 20(a) of the Exchange Act
[15  U.S.C.  § 78t(a)]  for  Cryptobontix’s  violations  of  Section  10(b)  [15  U.S.C.  §  78(j)(b)],  and
Rules 10b-5(a), (b), and (c) [17 C.F.R. § 240.10b-5(a), (b), and (c)] of the Exchange Act.
e. Hogg and Goldberg are liable as control persons under Section 20(a) of the
Exchange  Act  [15  U.S.C.  § 78t(a)]  for  Arbitrade’s  violations  of  Section  10(b)  [15  U.S.C.  §
78(j)(b)], and Rules 10b-5(a), (b), and (c) [17 C.F.R. § 240.10b-5(a), (b), and (c)] of the Exchange
Act.
f. Braverman   and   Barber   aided   and   abetted   violations   by   Arbitrade,
Cryptobontix, Hogg, and Goldberg of Section 10(b) [15 U.S.C. § 78(j)(b)], and Rules 10b-5(a),
(b), and (c) [17 C.F.R. § 240.10b-5(a), (b), and (c)] of the Exchange Act.
g. Relief  Defendant  SION,  a  company  that Barber  controlled,  received
proceeds of Defendants’ securities violations without any legitimate entitlement to the funds.

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6. The  Commission  requests,  among  other  things,  that  this  Court  enter  orders:  (a)
permanently restraining and enjoining Defendants from violating these provisions of the federal
securities  laws;  (b)  directing  Defendants  and  Relief  Defendant  to  pay  disgorgement  with
prejudgment  interest  based  upon  these  violations;  (c)  directing  Defendants  to  pay  civil  money
penalties;  and  (d)  issuing  an officer  and  director  bar  against  Hogg,  Goldberg,  Braverman,  and
Barber.
II. DEFENDANTS AND RELIEF DEFENDANT
A.  Defendants
7. Arbitrade is a Bermudan corporation based in Hamilton, Bermuda.  Arbitrade and
its securities have never been registered with the Commission in any capacity.
8. Cryptobontix is  a  Canadian  corporation  with  principal  offices  in  Grand  Bend,
Ontario, Canada.  Cryptobontix and its securities have never been registered with the Commission
in any capacity.
9.  Hogg is a resident of Grand Bend, Ontario, Canada.  Hogg is the founder, owner,
and sole officer and director of Cryptobontix.  Although Hogg never held a title as an officer or
director  of  Arbitrade,  Hogg  was  an  undisclosed  control  person  of  the  company.    He  exercised
overall control over Arbitrade and was the 60% owner of the company.
10. G
oldberg  is  a  resident  of  Miami,  Florida.    Goldberg  was  an  undisclosed  control
person of Arbitrade because he exercised significant control over the day-to-day business affairs
of  Arbitrade  and  had  the  second  largest  ownership  interest  in  the  company.    From  April  1989
through April 2018, Goldberg was a registered representative associated with 12 broker-dealers
registered with the Commission.

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11. Braverman is a resident of Newbury Park, California.  Braverman was held out as
the Chief Operations Officer of Arbitrade.  From September 1988 through June 2018, Braverman
was a registered representative associated with 21 broker-dealers registered with the Commission.
12. Barber is  a  resident  of  Salt  Lake  City,  Utah.    Barber  is  the  founder,  owner,  and
sole officer of SION.
B.  Relief Defendant
13. SION is  a  United  Arab  Emirates  company  engaged  in  the  business  of  precious
metals trading with principal place of business in Dubai, United Arab Emirates.  SION has never
been registered with the Commission in any capacity.  SION received ill-gotten gains in the form
of proceeds from fraudulent and unregistered sales of DIG tokens.
III. JURISDICTION AND VENUE
14. This  case  involves  the  offer  and  sale  of  securities  in  the  form  of  investment
contracts related to a crypto asset. The investment contracts are securities under Section 2(a)(1) of
the Securities Act [15 U.S.C. § 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. §
78c(a)(10)].  This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), and
22(a) of the Securities Act [ 15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)] and Sections 21(d), 21(e),
and 27(a) of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa(a)].
15. This  Court  has  personal  jurisdiction  over  Defendants,  and  venue  is  proper  in  the
Southern District of Florida, because, among other things, one Defendant resides in this District,
Defendants participated in the offer, purchase, or sale of securities in this District, and many  of
Defendants’ acts and transactions constituting violations of the Securities Act and Exchange Act
occurred in this District.

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16. In connection with the conduct alleged in this Complaint, Defendants, directly or
indirectly,  singly  or  in  concert  with  others,  have made  use  of  the  means  or  instrumentalities  of
interstate commerce, the means or instruments of transportation and communication in interstate
commerce, or of the mails.
IV. FACTUAL ALLEGATIONS
A. Background on Defendants
17. In early 2017, Hogg, through his company Cryptobontix, used Russian developers
to create a new Ethereum-based crypto asset, which was later called “Dignity” or “DIG.”
18. Hogg’s  purported  plan  was  to  fund  a  variety  of  crypto  asset  related  business
ventures, including a proprietary crypto asset-trading platform, a merchant payment platform, and
a crypto asset mining operation, through sales of these newly created DIG tokens.
19. All  three  billion  DIG  tokens  created were  owned  and  controlled  by  Hogg  and
Cryptobontix,  who  arranged  for  them  to  begin  trading  exclusively  on  a  Russian  crypto  asset-
trading platform called Livecoin around the end of 2017.
20. Hogg  recruited  Goldberg  and  Braverman  to  assist  with  this  new  venture,  and  he
used Arbitrade, another shell company he controlled, to be the corporate face behind the enterprise.
21. Arbitrade  and  Cryptobontix’s  plan  was  to  do  an  “initial  coin  offering”  of  DIG
tokens.
22. Arbitrade  and  Cryptobontix  promoted  their  business  plans  and  the  DIG  tokens
through Arbitrade’s website and social media.
23. Arbitrade’s website stated that DIG purchasers could expect profits based on the
success of its underlying business ventures, including mining of crypto assets and the creation of
a crypto asset-trading platform and merchant payment platform.

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24. In particular, Arbitrade’s website represented that DIG tokens would be redeemable
for gold, and that the supply of gold available for investor redemptions would be directly dependent
on the extent to which the companies’ business activities generated profits to fund gold purchases.
25. While  Arbitrade  and  Cryptobontix  did undertake efforts  to  build  a  crypto  asset-
trading  platform  and  merchant  payment  platform,  none  of  these  ventures  was  ever  completed.
They were only minimally successful with crypto asset mining and generated very little revenue
for the business.    Likewise, the initial coin offering that Arbitrade and Cryptobontix planned to
carry out never occurred.
B. The Sham Acquisition of Gold Bullion
26. Arbitrade   and   Cryptobontix   consistently   advertised   through   electronic   news
releases their intention to back the DIG tokens with gold worth $1 per token, despite the fact that
DIG always sold for prices far below $1 per token.
27. In  the  spring  of  2018,  Hogg  and Goldberg  were  introduced  to  Barber  and  his
company SION as a potential source to acquire that gold.
28. Following  negotiations  that  were  handled  by  Hogg,  in  late  June  2018,  Arbitrade
and SION executed a “Memorandum of Understanding” (MOU) pursuant to which they “agreed
to execute a definitive contract” under which Arbitrade would purportedly purchase $10 billion of
its “bullion requirements” from SION within the term of 15 years in exchange for, among other
things, an equity interest in Arbitrade and 150 million DIG.
29. Under  this  MOU,  Arbitrade  also  agreed  to  pay  SION  an  annual  fee  based  on  a
certain  percentage  of  the  bullion  value,  payable  in  monthly  installments  of  approximately  $1
million.

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30. Within a few  days  of executing the MOU, Arbitrade and SION signed an “Asset
Pledge Agreement,” under which SION agreed to provide to Arbitrade a “Safe Keeping Receipt”
purportedly holding title to the $10 billion in gold bullion.
31.   This purported gold  purchase  deal  was  finalized  in  September  2018  when
Arbitrade and SION executed an “Assignment Agreement” purporting to transfer to Arbitrade “all
of  [SION’s]  ownership  rights  and  title  in  the  Gold  which  vests  in  [SION]  pursuant  to  the  [Safe
Keeping Receipt].”
32. The one page Safe Keeping Receipt issued by G4S Cash Services LLC (“G4S”), a
company  that  specializes  in  vaulting  and  transport  of  valuable  assets,  was  attached  to  the
Assignment Agreement.
33. The Safe Keeping Receipt does not refer to Arbitrade or to SION holding title to
any gold of any value.
34. Instead, it makes cryptic reference to some sort of “package” held in a vault under
an account in SION’s name purportedly containing a gold “Certificate of Guarantee.”
35. All  of  the  agreements  regarding  this  purported  gold  acquisition  transaction  were
signed by Barber on behalf of SION.
36. Hogg handled the negotiations between Arbitrade and SION and had the final word
on the deal.
37.   The  agreements  between  Arbitrade  and  SION,  along  with  the  Safe  Keeping
Receipt,  constitute the entire basis for Arbitrade’s claim to have acquired title to $10 billion worth
of gold.
38. Arbitrade never received any information from Barber or SION regarding the origin
of the gold, the identity of the seller, or its storage location.

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39. It is highly unlikely that the gold referred to in the Safe Keeping Receipt even exists.
40. The “Certificate  of  Guarantee”  and  related  documentation  purportedly  issued  by
“UBS”  as  referenced  in  the  G4S  Safe  Keeping  Receipt  appear  to  be  forgeries  as  they  contain
numerous spelling and punctuation errors, and significant portions are illegible.
41. To  create  the  appearance  that  the  gold transaction  was  legitimate,  Arbitrade  also
engaged  the  services  of  two  accounting  firms  to  evaluate  and  confirm  certain  details  of  the
transaction.
42. In  August  2018,  Arbitrade  retained  an  accounting  firm  recommended  by  Barber,
Elliott Davis, LLC (“Elliott Davis”), to confirm the issuance of the Safe Keeping Receipt and that
the  Assignment  Agreement  was  properly  executed  and  contained  provisions  assigning  SION’s
purported ownership rights and title to the gold to Arbitrade.
43. Although Elliot Davis returned a report acknowledging this information, the report
did  not  confirm  – and Arbitrade  never  asked  Elliot  Davis  to do  so –    whether  SION  actually
possessed real, much less transferable, ownership rights or title to gold bullion.
44. Similarly,  in  September  2018  Arbitrade  retained  BDO  USA,  LLP  (“BDO”)
purportedly to assess the authenticity of the Safe Keeping Receipt.
45. Based  upon  Arbitrade’s request,  BDO  issued  a  report  stating  only that  it  had
confirmed that G4S issued the Safe Keeping Receipt, after SION provided BDO with a copy of a
document that had certified an unspecified value in holdings to G4S personnel and proof that this
document  was  placed  in  a  vault  there.    BDO’s  report  did  not  confirm  whether  SION  possessed
ownership rights or title to gold bullion.
46. Arbitrade, Hogg, Goldberg, and  Braverman never asked Elliott Davis or BDO to
confirm the existence, location, ownership, or origin of the gold itself.

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47. Neither  Hogg,  Goldberg,  nor  Braverman  objected  to  the  narrow  parameters  of
Elliott Davis’ work that SION dictated.
48. Moreover,  they  ignored  the  red  flag  presented  when  SION  told  BDO  to  drop  its
request for a video conference with the G4S employee whose signature purportedly appears on the
Safe Keeping Receipt.
49. Arbitrade  also  acquiesced  to  SION’s  requirement  that  Arbitrade  should  have  no
direct communications with G4S personnel.
50. Around October 2018, Arbitrade tasked Braverman with hiring Bureau Veritas, a
company that specializes in inspection and certification services, to provide an opinion about the
existence of the gold that Arbitrade purportedly purchased from SION.
51. Bureau  Veritas  refused  to  accept  the  engagement  when  it  became  clear  that
Arbitrade wanted the firm to issue its opinion without conducting any physical examination of the
gold, with Braverman telling the firm that “[c]ounting bars I believe is overkill.”
C. Materially False and Misleading Statements in News Releases
Regarding the Gold Acquisition

52. To increase demand for DIG on the Livecoin trading platform, beginning in around
March  2018  and  continuing  until  January  2019,  Arbitrade  and  Cryptobontix  engaged  in  a
promotional  campaign  to  tout  the  business  and  DIG  tokens  through  emailed  news  releases  and
press releases disseminated t o the public, and at least one “press conference.”
53. During the course of this promotional activity, Arbitrade and Cryptobontix, through
Hogg,  Goldberg,  Braverman,  and  Barber, made  material  misstatements  or  omissions  in several
releases  and  in  the  press  conference concerning  Arbitrade’s  purported  acquisition  of  billions  of
dollars’ worth of gold bullion.

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54. Hogg  and  Goldberg  reviewed  and  approved  at  least  three  of  the  false  and
misleading  releases  before  they  were  issued  to  the  public,  and  Hogg  participated  in  the  press
conference.
55. Braverman also reviewed at least one of the false press releases prior to its issuance,
and Barber reviewed two of the releases before they went out.
56. On  May  24,  2018,  Arbitrade  and  Cryptobontix  issued  an  email  news  release
purporting to correct various “online rumors,” including the companies’ gold acquisition plans.
57. The news release claimed that Arbitrade was acquiring $8.7 billion worth of “four
bullions (gold, silver, platinum, and palladium) that will back the company’s four major tokens,”
including DIG.
58. The news release compared this bullion acquisition to the purchase of a house with
a mortgage, whereby Arbitrade would be receiving title to the bullion from the seller, who would
then place a debt against the bullion under a structured financing plan over a certain period of time.
59. According  to  the  release,  Cryptobontix  and  Arbitrade  planned  to  use  half  of  the
daily  proceeds  from  their  crypto  asset  operations  to  pay  off  the  debt  on  the  $8.7  billion  bullion
purchase.
60. The  news  release  also  claimed  that  investors  would  be  able  to  redeem  their  DIG
crypto assets for bullion.
61. On  June  28,  2018,  Arbitrade  held  a  telephonic  “press  conference”  during  which
Hogg announced and discussed the company’s “partnership” with SION through which he claimed
Arbitrade would be receiving title to $10 billion worth of physical gold.
62. During this call, Hogg also stated that Arbitrade had “basically recreated the gold
standard for the cryptocurrency sector.”

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63. On  July  5,  2018,  Arbitrade  and  Cryptobontix  issued  another  email  news  release
announcing, among other things, Arbitrade’s “definitive deal” to acquire $10 billion in gold bullion
from SION that will be held at a “Brinks’ vault.”
64. This news release claimed that Arbitrade would have the title certificate to the gold
bullion, which was described as the Safe Keeping Receipt, in hand within two weeks, and the gold
would be “audited by a major accounting firm.”
65. According to this release, out of the $10 billion of gold bullion acquired, $3 billion
worth  ($1.00 worth  of  gold  for  every  token  issued)  was  allocated  to  backing  DIG,  with  the
remainder allocated to Arbitrade and Cryptobontix’s alleged other crypto assets.
66. A  few  months  later,  on  November  5,  2018,  Arbitrade  issued  a  press  release
announcing that the company had received title to gold bullion worth “in excess of $10 billion,”
which would be used to back its tokens,  and that this gold was being “stored at independent security
facilities.”
67. In  this  press  release,  Arbitrade  further  claimed  to  have completed  the  required
“regulatory gold vaulting verification compliance.”  The release also stated that an independent
public  accounting  firm  had  “verified  the  account  in  good  standing”  and  “confirmed”  a  Safe
Keeping Receipt of the gold through “direct confirmation from the independent secure vaulting
company.”
68. On January 9, 2019, Arbitrade issued a press release announcing that its December
“shipment of gold” from SION “has been vaulted and secured” in the form of an “additional $3.8m
of hallmarked gold bars.”

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69. The  release  also  stated  that,  “[u]tilizing  SION’s  procurement  network,  Arbitrade
ensures consistent growth of its precious metals holdings, going above and beyond the $10 billion
announced earlier in 2018.”
70. The  release  further  claimed  that  SION  had  “provided  $250  million  in  credit”  to
facilitate these purchases on Arbitrade’s behalf.
71. The representations made in these news and press releases and the conference call
concerning  Arbitrade’s  purported  acquisition  of  billions  of  dollars’  worth  of  gold bullion  were
blatantly false and misleading.
72. Arbitrade never acquired or received title to $10 billion in gold bullion.
73. Moreover,  no  audit  of  the  $10  billion  in  gold  was  ever  performed  by  a  major
accounting firm as represented in the July 5, 2018, news release.
74. BDO  never  audited  the  gold,  but  merely  confirmed  certain  documentation  that
Arbitrade and SION presented to it.
75. Likewise,  the  statements  made  in  the  November  5,  2018, press  release  regarding
verification of the account and the Safe Keeping Receipt by an independent accounting firm are
misleading given that Arbitrade’s title to real gold did not exist and Arbitrade never completed any
required “gold vaulting verification compliance.”
D. Sales of DIG on Livecoin
76. The false and misleading news releases and conference call served to create demand
for DIG and had a material impact on the price of DIG sales on the Livecoin trading platform.
77. Except for  the  January  9,  2019, press  release,  each  of  the  fraudulent  releases
resulted in a spike in the price of DIG.

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78. For  example,  following  the  May  24,  2018, email  news  release,  the  price  of  DIG
jumped from about $0.11 to $0.16 a token, an over 45% increase in price.
79. Simultaneous  with  Arbitrade  and  Cryptobontix  conducting  the  false  promotional
campaign,  Hogg and  Goldberg  sold  DIG  tokens,  which  were  owned  by  Cryptobontix, on  the
Livecoin trading platform at artificially inflated prices for proceeds totaling about $36.8 million.
80. Between the end of 2017 and mid-2019, the entire time period during which Hogg
and Goldberg sold DIG tokens on Livecoin, they made proceeds totaling about $45 million.
81. Hogg and Goldberg exclusively handled all of these sales of DIG on Livecoin and
generally sold DIG in exchange for Bitcoin.
82. DIG  investors  committed  funds  in  the  form  of  Bitcoin  or  other  crypto  assets  to
participate in an investment opportunity.
83. DIG investors’  fortunes  were  inextricably  tied  to  the  success  or  failure  of  the
management of Cryptobontix and Arbitrade to generate a profit for investors, namely an increase
in the value of their DIG tokens.  The fortunes of investors and the companies’ management were
also intertwined because management held and received DIG tokens through which they expected
to receive a profit.
84. DIG investors’ role was limited to purchasing the DIG tokens through the Livecoin
trading platform.  Investors had no role in the business operations of Cryptobontix or Arbitrade
and were entirely passive.  Instead, investors relied solely on Arbitrade and Cryptobontix, and their
management, to generate a profit for investors, namely an increase in the value of their DIG tokens.
Investors’  expectation  of  those  profits  came  from,  among  other  things,  the  representations  that
Arbitrade  and  Cryptobontix  would  obtain  the  promised  gold  to  back  the  DIG  tokens,   and  that
investors  would  be  able  to  redeem  DIG  tokens  for  gold, of  which  the  supply  would  be  directly

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dependent  on  the  extent  to  which  revenues  were  generated  to  fund  company  gold  purchases.
Investors would have also expected profits based on the success of Arbitrade’s underlying business
ventures, including mining of crypto assets and the creation of a crypto asset trading platform and
merchant payment platform.
85. No registration statement was filed or in effect for the DIG tokens during the time
of  the  events  set  forth  in  this  Complaint.    Furthermore,  no  exemptions  from  registration  are
available, including exemptions under the Securities Act.
86. Braverman was responsible for converting the Bitcoin proceeds of their DIG sales
to  cash  through  an  account  he  had  at  a U.S .- based crypto  asset-trading  platform in  the  name  of
Rozgold, an entity he owned and controlled.
87. The  cash  would  be  transferred  into  Rozgold’s  bank  account,  which  Braverman
would then distribute based on instructions from Hogg or Goldberg.
88. Braverman also retained some of the proceeds from the Bitcoin sales for himself.
89. Braverman falsely represented  to  the  crypto  asset-trading  platform that  he  was
trading for the benefit of Rozgold and failed to disclose that he was in fact engaged in crypto asset
transactions for the benefit of third parties.
90. SION received at least $2.5 million in ill-gotten gains in the form of proceeds from
fraudulent and unregistered sales of DIG tokens.
91. The  DIG  token has  since  been  delisted  from  the  Livecoin  trading  platform  as  of
February 2020, when it reached a sustained valuation of zero.

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V. CLAIMS FOR RELIEF

COUNT I
Violations of Sections 5(a) and (c) of the Securities Act
(Against Arbitrade, Cryptobontix, Hogg and Goldberg)

92. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
93. No registration statement was filed or in effect with the Commission pursuant to the
Securities Act with respect to the securities Arbitrade, Cryptobontix, Hogg and Goldberg offered
and sold as described in this Complaint and no exemption from registration existed with respect
to these securities.
94. From  at  least  May  2018  to  January 2019, Arbitrade,  Cryptobontix,  Hogg  and
Goldberg, directly or indirectly:
(a) made   use   of   any   means   or   instruments   of   transportation   or
communication  in  interstate  commerce  or  of  the  mails  to  sell
securities, through the use or medium of a prospectus or otherwise;

(b) carried  or  caused  to  be  carried  securities  through  the  mails  or  in
interstate commerce, by any means or instruments of transportation,
for the purpose of sale or delivery after sale; or

(c) made   use   of   any   means   or   instruments   of   transportation   or
communication in interstate commerce or of the mails to offer to sell
or  offer  to  buy  through  the  use  or  medium  of  any  prospectus  or
otherwise any security,

without a registration statement having been filed or being in effect with the Commission as to
such securities.
95. By reason of the foregoing, Arbitrade, Cryptobontix, Hogg and Goldberg violated,
and  unless  enjoined,  are  reasonably  likely  to  continue  to  violate  Sections 5(a)  and  (c)  of  the
Securities Act [15 U.S.C. § 77e(a) and (c)].

17
COUNT II
Violations of Section 17(a)(1) of the Securities Act
(Against Hogg and Goldberg)

96. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
97. From at least May 2018 to January 2019, Hogg and Goldberg, in the offer or sale
of any securities by the use of any means or instruments of transportation or communication in
interstate  commerce  or  by  use  of  the  mails,  directly  or  indirectly,  knowingly  or  recklessly
employed any device, scheme, or artifice to defraud.
98. By reason of the foregoing, Hogg and Goldberg violated, and, unless enjoined, are
reasonably  likely  to  continue  to  violate,  Section  17(a)(1)  of  the  Securities  Act  [15  U.S.C.  §
77q(a)(1)].
COUNT III
Violations of Section 17(a)(2) of the Securities Act
(Against Hogg and Goldberg)

99. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
100. From at least May 2018 to January 2019, Hogg and Goldberg, in the offer or sale
of  securities  by  the  use  of  any  means  or  instruments  of  transportation  or  communication  in
interstate commerce or by use of the mails, directly or indirectly, negligently obtained money or
property by means of any untrue statement of a material fact or any omission to state a material
fact necessary in order to make the statements made, in light of the circumstances under which
they were made, not misleading.
101. By reason of the foregoing, Hogg and Goldberg violated, and, unless enjoined, are
reasonably  likely  to  continue  to  violate,  Section  17(a)(2)  of  the  Securities  Act  [  15  U.S.C.  §
77q(a)(2)].

18
COUNT IV
Violations of Section 17(a)(3) of the Securities Act
(Against Hogg and Goldberg)

102. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
103. From at least May 2018 to January 2019, Hogg and Goldberg, in the offer or sale
of  securities  by  the  use  of  any  means  or  instruments  of  transportation  or  communication  in
interstate  commerce  or  by  use  of  the  mails,  directly  or  indirectly,  negligently  engaged  in
transactions, practices and courses of business which operated or would have operated as a fraud
or deceit upon the purchasers and prospective purchasers of such securities.
104. By reason of the foregoing, Hogg and Goldberg violated, and, unless enjoined, are
reasonably  likely  to  continue  to  violate,  Section  17(a)(3)  of  the  Securities  Act  [15  U.S.C.  §
77q(a)(3)].
COUNT V
Violations of Section 10(b) and Rule 10b-5(a) of the Exchange Act
(Against Arbitrade, Cryptobontix, Hogg and Goldberg)

105. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
106. From  at  least  May  2018  to  January  2019, Arbitrade,  Cryptobontix,  Hogg  and
Goldberg, directly and indirectly, by use of any means or instrumentality of interstate commerce,
or  of  the  mails,  knowingly  or  recklessly  employed  devices,  schemes,  or  artifices  to  defraud  in
connection with the purchase or sale of securities.
107. By reason of the foregoing, Arbitrade, Cryptobontix, Hogg and Goldberg violated,
and,  unless  enjoined,  are  reasonably  likely  to  continue  to  violate, Section  10(b)  [15  U.S.C.  §
78(j)(b)] and Rule 10b-5(a) of the Exchange Act [17 C.F.R. § 240.10b-5(a)].

19
COUNT VI
Violations of Section 10(b) and Rule 10b-5(b) of the Exchange Act
 (Against Arbitrade, Cryptobontix, Hogg and Goldberg)

108. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
109. From  at  least  May  2018  to  January  2019, Arbitrade,  Cryptobontix,  Hogg  and
Goldberg, directly and indirectly, by use of any means or instrumentality of interstate commerce,
or of the mails, knowingly or recklessly made untrue statements of material facts and omitted to
state material facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading in connection with the purchase or sale of securities.
110. By reason of the foregoing, Arbitrade, Cryptobontix, Hogg and Goldberg violated,
and,  unless  enjoined,  are  reasonably  likely  to  continue  to  violate, Section  10(b)  [15  U.S.C.  §
78(j)(b)] and Rule 10b-5(b) of the Exchange Act [17 C.F.R. § 240.10b-5(b)].
COUNT VII
Violations of Section 10(b) and Rule 10b-5(c) of the Exchange Act
 (Against Arbitrade, Cryptobontix, Hogg and Goldberg)

111. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
112. From  at  least  May  2018  to  January  2019, Arbitrade,  Cryptobontix,  Hogg  and
Goldberg, directly and indirectly, by use of any means or instrumentality of interstate commerce,
or of the mails, knowingly or recklessly engaged in acts, practices and courses of business which
operated  or  would  have  operated  as  a  fraud  or  deceit  upon  any  person in  connection  with  the
purchase or sale of securities.
113. By reason of the foregoing, Arbitrade, Cryptobontix, Hogg and Goldberg violated,
and,  unless  enjoined,  are  reasonably  likely  to  continue  to  violate, Section  10(b)  [15  U.S.C.  §
78(j)(b)] and Rule 10b-5(c) of the Exchange Act [17 C.F.R. § 240.10b-5(c)].

20
COUNT VIII
Control Person Liability under Section 20(a) of the Exchange Act for Violations of Section
10(b) of the Exchange Act and Rule 10b-5 thereunder by Cryptobontix
(Against Hogg)

114. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
115. At all relevant times, Hogg was a control person of Cryptobontix for purposes of
Section 20(a) of the Exchange Act [15 U.S.C § 78t(a)].
116. As alleged above in Counts V-VII, from approximately May 2018 through January
2019, Cryptobontix violated Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rules
10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), and (c)].
117. As a control person of Cryptobontix, Hogg is jointly and severally liable with and
to the same extent as Cryptobontix for each of the violations of Section 10(b) of the Exchange Act
[15 U.S.C. § 78(j)(b)], and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b),
and (c)].
118. By reason of the foregoing, Hogg has violated, and unless enjoined, is reasonably
likely to continue to violate Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rules
10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), and (c)].
COUNT IX
Control Person Liability under Section 20(a) of the Exchange Act for Violations of Section
10(b) of the Exchange Act and Rule 10b-5 thereunder by Arbitrade
(Against Hogg and Goldberg)

119. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
120. At  all  relevant  times,  Hogg  and  Goldberg  were  control  persons  of  Arbitrade  for
purposes of Section 20(a) of the Exchange Act [15 U.S.C § 78t(a)].

21
121. As alleged above in Counts V-VII, from approximately May 2018 through January
2019, Arbitrade violated Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rules 10b-
5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), and (c)].
122. As control persons of Arbitrade, Hogg and Goldberg are jointly and severally liable
with and to the same extent as Arbitrade for each of the violations of Section 10(b) of the Exchange
Act [15 U.S.C. § 78(j)(b)], and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a),
(b), and (c)].
123. By reason of the foregoing, Hogg and Goldberg have violated, and unless enjoined,
are  reasonably  likely  to  continue  to  violate  Section  10(b)  of  the  Exchange  Act  [15  U.S.C.  §
78(j)(b)], and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), and (c)].
COUNT X
Aiding and Abetting Violations of Section 10(b) and Rule 10b-5(a) of the Exchange Act
by Cryptobontix, Arbitrade, Hogg and Goldberg
(Against Braverman and Barber)

124. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
125. As alleged above in Count V, Cryptobontix, Arbitrade, Hogg and Goldberg violated
Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(a) thereunder [17 C.F.R.
§ 240.10b-5(a)].
126. From at least May 2018 to January 2019, Braverman and Barber knowingly, or with
extreme recklessness, provided substantial assistance to, and thereby aided and abetted violations
of Section  10(b)  of  the  Exchange  Act  [15  U.S.C.  §  78(j)(b)],  and  Rule  10b-5(a) thereunder [17
C.F.R. § 240.10b-5(a)] by Arbitrade, Cryptobontix, Hogg and Goldberg.
127. By  reason  of  the  foregoing,  pursuant  to  Section  20(e)  of  the  Exchange  Act  [15
U.S.C. § 78t(e)].  Braverman and Barber aided and abetted, and unless enjoined, are reasonably

22
likely to continue to aid and abet, violations of Section 10(b) of the Exchange Act [15 U.S.C. §
78(j)(b)], and Rule 10b-5(a) thereunder [17 C.F.R. § 240.10b-5(a)].
COUNT XI
Aiding and Abetting Violations of Section 10(b) and Rule 10b-5(b) of the Exchange Act
by Cryptobontix, Arbitrade, Hogg and Goldberg
(Against Braverman and Barber)

128. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.
129. As  alleged  above  in  Count  VI,  Cryptobontix,  Arbitrade,  Hogg  and  Goldberg
violated Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(b) thereunder
[17 C.F.R. § 240.10b-5(b)].
130. From at least May 2018 to January 2019, Braverman and Barber knowingly, or with
extreme recklessness, provided substantial assistance to, and thereby aided and abetted violations
of Section  10(b)  of  the  Exchange  Act  [15  U.S.C.  §  78(j)(b)],  and  Rule  10b-5(b) thereunder [17
C.F.R. § 240.10b-5(b)] by Arbitrade, Cryptobontix, Hogg and Goldberg.
131. By  reason  of  the  foregoing,  pursuant  to  Section  20(e)  of  the  Exchange  Act  [15
U.S.C. § 78t(e)].  Braverman and Barber aided and abetted, and unless enjoined, are reasonably
likely to continue to aid and abet, violations of Section 10(b) of the Exchange Act [15 U.S.C. §
78(j)(b)], and Rules 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)].
COUNT XII
Aiding and Abetting Violations of Section 10(b) and Rule 10b-5(c) of the Exchange Act
by Cryptobontix, Arbitrade, Hogg and Goldberg
(Against Braverman and Barber)

132. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as
if fully set forth herein.

23
133. As  alleged  above  in  Count  VII,  Cryptobontix,  Arbitrade,  Hogg  and  Goldberg
violated Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(c) thereunder
[17 C.F.R. § 240.10b-5(c)].
134. From at least May 2018 to January 2019, Braverman and Barber knowingly, or with
extreme recklessness, provided substantial assistance to, and thereby aided and abetted violations
of Section  10(b)  of  the  Exchange  Act  [15  U.S.C.  §  78(j)(b)],  and  Rule  10b-5(c) thereunder [17
C.F.R. § 240.10b-5(c)] by Arbitrade, Cryptobontix, Hogg and Goldberg.
135. By  reason  of  the  foregoing,  pursuant  to  Section  20(e)  of  the  Exchange  Act  [15
U.S.C. § 78t(e)].  Braverman and Barber aided and abetted, and unless enjoined, are reasonably
likely to continue to aid and abet, violations of Section 10(b) of the Exchange Act [15 U.S.C. §
78(j)(b)], and Rule 10b-5(c) thereunder [17 C.F.R. § 240.10b-5(c)].
COUNT XIII
Unjust Enrichment
(Against Relief Defendant SION)

136. The Commission repeats and realleges Paragraphs 1 through 91 of this Complaint
as if fully set forth herein.
137. SION received at least $2.5 million in ill-gotten gains in the form of proceeds from
fraudulent and unregistered sales of DIG tokens, to which it lacks a legitimate claim.
138. SION obtained these funds as part of the securities law violations alleged above,
under circumstances in which it is not just or equitable for it to retain the funds.
139. By reason of the foregoing, SION has been unjustly enriched and must disgorge its
ill-gotten gains.
VI. RELIEF REQUESTED
WHEREFORE,  the  Commission  respectfully  requests  the  Court  find  the  Defendants
committed the violations alleged and:

24
A.
Permanent Injunctive Relief
Issue  a  Permanent  Injunction  enjoining  Defendants,  their  officers,  agents,  servants,
employees,  attorneys,  and  all  persons  in  active  concert  or  participation  with  them,  and  each  of
them, from violating the federal securities laws alleged in this Complaint.
B.
Disgorgement
Issue an Order directing Defendants and Relief Defendant SION to disgorge all ill-gotten
gains  or  proceeds  received  including  prejudgment  interest  thereon  as  a  result  of  the  acts  and/or
courses of conduct alleged in this Complaint.
C.
Penalties
Issue an Order directing Defendants to pay civil money penalties pursuant to Section 20(d)
of the Securities Act [ 15 U.S.C. § 77t(d)] and/or Section 21(d)(3) of the Exchange Act [ 15 U.S.C.
§ 78u(d)(3)].
D.
Officer and Director Bar
Issue an Officer and Director bar against Hogg, Goldberg, Braverman, and Barber pursuant
to Section 20(e) of the Securities Act and/or Section 21(d)(2) of the Exchange Act.

25
E.
Further Relief
Grant such other and further relief as may be necessary and appropriate.
F.
Retention of Jurisdiction
Retain jurisdiction over this action and over the Defendants in order to implement and carry
out  the  terms  of  all  orders  and  decrees  that  may  hereby  be  entered,  or  to  entertain  any  suitable
application or motion by the Commission for additional relief within the jurisdiction of this Court.
VII.  DEMAND FOR JURY TRIAL
The Commission hereby demands a jury trial on any and all issues so triable.

September 30, 2022 Respectfully submitted,

 Alice K. Sum

Alice K. Sum, Esq.
Trial Counsel
Fla. Bar No. 354510
Direct Dial: (305) 416-6293
Email:  [email protected]

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
801 Brickell Avenue, Suite 1950
Miami, Florida 33131
Telephone:    (305) 982-6300
Facsimile: (305) 536-4154

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF FLORIDA 

 
CASE NO.: _____________ 

 
  
SECURITIES AND EXCHANGE COMMISSION,  
  

Plaintiff,  
   
v.  
  
ARBITRADE LTD.,  
CRYPTOBONTIX INC.,  
TROY R.J. HOGG,  
JAMES L. GOLDBERG,  
STEPHEN L. BRAVERMAN, and  
MAX W. BARBER,  

 

  
Defendants, and  

 
SION TRADING FZE,  
 

Relief Defendant. 

 

  
 

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF 
AND DEMAND FOR JURY TRIAL 

 
Plaintiff Securities and Exchange Commission (the “Commission”) alleges: 

I. INTRODUCTION 

1. The Commission brings this action as a result of a crypto asset pump-and-dump 

scheme perpetrated by Arbitrade Ltd. (“Arbitrade”), a Bermudan company, and Cryptobontix Inc. 

(“Cryptobontix”), a Canadian company, and their principals, Troy R. J. Hogg (“Hogg”), James L. 

Goldberg (“Goldberg”), and Stephen L. Braverman (“Braverman”), and a so-called international 

gold trader, Max W. Barber (“Barber”).  The misconduct involved in this matter centered on an 

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2 

Ethereum-based1 crypto asset that Arbitrade and Cryptobontix owned and controlled called 

“Dignity” or “DIG,” which was traded exclusively on a crypto asset-trading platform called 

Livecoin. 

2. Although this case involves crypto assets, it bears the hallmarks of a classic pump 

and dump scheme. 

3. Between May 2018 and January 2019, Arbitrade and Cryptobontix, through Hogg, 

Goldberg, Braverman, and Barber, made material misrepresentations and omissions to investors 

while they were offering and selling DIG in a series of news and press releases issued to the public 

and a press conference.  They also participated in a scheme to defraud.  Among other things, the 

releases falsely claimed that Arbitrade had acquired and received title to $10 billion in gold bullion 

and intended to back each DIG token issued and sold to investors with $1.00 worth of this gold. 

Arbitrade claimed to have acquired the gold through a purchase transaction with Barber and his 

company, SION Trading FZE (“SION”).  The Defendants also misrepresented that independent 

accounting firms had performed an “audit” of the gold and verified its existence.  In reality, the 

gold acquisition transaction with Barber and SION was a sham. 

4. Arbitrade and Cryptobontix, through Hogg, Goldberg, and Braverman, used the 

false and misleading releases and press conference to generate demand for DIG on the Livecoin 

trading platform.  The fraudulent releases had a material impact on the price of DIG sales on this 

trading platform.  Simultaneous with Arbitrade and Cryptobontix conducting the fraudulent 

promotional campaign, Hogg and Goldberg, with Braverman’s assistance, sold DIG tokens on the 

                                                 
1 Ethereum describes itself as a technology for building apps and organizations, holding assets, 
transacting and communicating without being controlled by a central authority.  It supports smart 
contracts, which digitize agreements by turning the terms of an agreement into computer code that 
automatically executes when the contract terms are met. 

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3 

Livecoin trading platform at artificially inflated prices, which resulted in proceeds totaling about 

$36.8 million.   

5. As a result of the conduct alleged in this Complaint: 

a. Arbitrade, Cryptobontix, Hogg, and Goldberg violated Sections 5(a) and (c) 

of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77e(a) and (c)]; 

b. Hogg and Goldberg violated Sections 17(a)(1), (2), and (3) of the Securities 

Act [15 U.S.C. § 77q(a)(1), (2), and (3)]; and 

c. Arbitrade, Cryptobontix, Hogg, and Goldberg violated Section 10(b) [15 

U.S.C. § 78(j)(b)], and Rules 10b-5(a), (b), and (c) [17 C.F.R. § 240.10b-5(a), (b), and (c)] of the 

Securities Exchange Act of 1934 (“Exchange Act”). 

d. Hogg is liable as a control person under Section 20(a) of the Exchange Act 

[15 U.S.C. § 78t(a)] for Cryptobontix’s violations of Section 10(b) [15 U.S.C. § 78(j)(b)], and 

Rules 10b-5(a), (b), and (c) [17 C.F.R. § 240.10b-5(a), (b), and (c)] of the Exchange Act.  

e. Hogg and Goldberg are liable as control persons under Section 20(a) of the 

Exchange Act [15 U.S.C. § 78t(a)] for Arbitrade’s violations of Section 10(b) [15 U.S.C. § 

78(j)(b)], and Rules 10b-5(a), (b), and (c) [17 C.F.R. § 240.10b-5(a), (b), and (c)] of the Exchange 

Act. 

f. Braverman and Barber aided and abetted violations by Arbitrade, 

Cryptobontix, Hogg, and Goldberg of Section 10(b) [15 U.S.C. § 78(j)(b)], and Rules 10b-5(a), 

(b), and (c) [17 C.F.R. § 240.10b-5(a), (b), and (c)] of the Exchange Act. 

g. Relief Defendant SION, a company that Barber controlled, received 

proceeds of Defendants’ securities violations without any legitimate entitlement to the funds.   

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4 

6. The Commission requests, among other things, that this Court enter orders: (a) 

permanently restraining and enjoining Defendants from violating these provisions of the federal 

securities laws; (b) directing Defendants and Relief Defendant to pay disgorgement with 

prejudgment interest based upon these violations; (c) directing Defendants to pay civil money 

penalties; and (d) issuing an officer and director bar against Hogg, Goldberg, Braverman, and 

Barber. 

II. DEFENDANTS AND RELIEF DEFENDANT 

A.  Defendants 

7. Arbitrade is a Bermudan corporation based in Hamilton, Bermuda.  Arbitrade and 

its securities have never been registered with the Commission in any capacity.  

8. Cryptobontix is a Canadian corporation with principal offices in Grand Bend, 

Ontario, Canada.  Cryptobontix and its securities have never been registered with the Commission 

in any capacity. 

9.  Hogg is a resident of Grand Bend, Ontario, Canada.  Hogg is the founder, owner, 

and sole officer and director of Cryptobontix.  Although Hogg never held a title as an officer or 

director of Arbitrade, Hogg was an undisclosed control person of the company.  He exercised 

overall control over Arbitrade and was the 60% owner of the company.   

10. Goldberg is a resident of Miami, Florida.  Goldberg was an undisclosed control 

person of Arbitrade because he exercised significant control over the day-to-day business affairs 

of Arbitrade and had the second largest ownership interest in the company.  From April 1989 

through April 2018, Goldberg was a registered representative associated with 12 broker-dealers 

registered with the Commission.   

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5 

11. Braverman is a resident of Newbury Park, California.  Braverman was held out as 

the Chief Operations Officer of Arbitrade.  From September 1988 through June 2018, Braverman 

was a registered representative associated with 21 broker-dealers registered with the Commission.   

12. Barber is a resident of Salt Lake City, Utah.  Barber is the founder, owner, and 

sole officer of SION. 

B.  Relief Defendant 

13. SION is a United Arab Emirates company engaged in the business of precious 

metals trading with principal place of business in Dubai, United Arab Emirates.  SION has never 

been registered with the Commission in any capacity.  SION received ill-gotten gains in the form 

of proceeds from fraudulent and unregistered sales of DIG tokens. 

III. JURISDICTION AND VENUE 

14. This case involves the offer and sale of securities in the form of investment 

contracts related to a crypto asset. The investment contracts are securities under Section 2(a)(1) of 

the Securities Act [15 U.S.C. § 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. § 

78c(a)(10)].  This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), and 

22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a)] and Sections 21(d), 21(e), 

and 27(a) of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa(a)]. 

15. This Court has personal jurisdiction over Defendants, and venue is proper in the 

Southern District of Florida, because, among other things, one Defendant resides in this District, 

Defendants participated in the offer, purchase, or sale of securities in this District, and many of 

Defendants’ acts and transactions constituting violations of the Securities Act and Exchange Act 

occurred in this District.   

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6 

16. In connection with the conduct alleged in this Complaint, Defendants, directly or 

indirectly, singly or in concert with others, have made use of the means or instrumentalities of 

interstate commerce, the means or instruments of transportation and communication in interstate 

commerce, or of the mails. 

IV. FACTUAL ALLEGATIONS 

A. Background on Defendants 

17. In early 2017, Hogg, through his company Cryptobontix, used Russian developers 

to create a new Ethereum-based crypto asset, which was later called “Dignity” or “DIG.”   

18. Hogg’s purported plan was to fund a variety of crypto asset related business 

ventures, including a proprietary crypto asset-trading platform, a merchant payment platform, and 

a crypto asset mining operation, through sales of these newly created DIG tokens.   

19. All three billion DIG tokens created were owned and controlled by Hogg and 

Cryptobontix, who arranged for them to begin trading exclusively on a Russian crypto asset-

trading platform called Livecoin around the end of 2017.   

20. Hogg recruited Goldberg and Braverman to assist with this new venture, and he 

used Arbitrade, another shell company he controlled, to be the corporate face behind the enterprise.     

21. Arbitrade and Cryptobontix’s plan was to do an “initial coin offering” of DIG 

tokens. 

22. Arbitrade and Cryptobontix promoted their business plans and the DIG tokens 

through Arbitrade’s website and social media.   

23. Arbitrade’s website stated that DIG purchasers could expect profits based on the 

success of its underlying business ventures, including mining of crypto assets and the creation of 

a crypto asset-trading platform and merchant payment platform.   

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24. In particular, Arbitrade’s website represented that DIG tokens would be redeemable 

for gold, and that the supply of gold available for investor redemptions would be directly dependent 

on the extent to which the companies’ business activities generated profits to fund gold purchases. 

25. While Arbitrade and Cryptobontix did undertake efforts to build a crypto asset-

trading platform and merchant payment platform, none of these ventures was ever completed.  

They were only minimally successful with crypto asset mining and generated very little revenue 

for the business.  Likewise, the initial coin offering that Arbitrade and Cryptobontix planned to 

carry out never occurred. 

B. The Sham Acquisition of Gold Bullion 

26. Arbitrade and Cryptobontix consistently advertised through electronic news 

releases their intention to back the DIG tokens with gold worth $1 per token, despite the fact that 

DIG always sold for prices far below $1 per token.   

27. In the spring of 2018, Hogg and Goldberg were introduced to Barber and his 

company SION as a potential source to acquire that gold.   

28. Following negotiations that were handled by Hogg, in late June 2018, Arbitrade 

and SION executed a “Memorandum of Understanding” (MOU) pursuant to which they “agreed 

to execute a definitive contract” under which Arbitrade would purportedly purchase $10 billion of 

its “bullion requirements” from SION within the term of 15 years in exchange for, among other 

things, an equity interest in Arbitrade and 150 million DIG.   

29. Under this MOU, Arbitrade also agreed to pay SION an annual fee based on a 

certain percentage of the bullion value, payable in monthly installments of approximately $1 

million.   

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30. Within a few days of executing the MOU, Arbitrade and SION signed an “Asset 

Pledge Agreement,” under which SION agreed to provide to Arbitrade a “Safe Keeping Receipt” 

purportedly holding title to the $10 billion in gold bullion. 

31.   This purported gold purchase deal was finalized in September 2018 when 

Arbitrade and SION executed an “Assignment Agreement” purporting to transfer to Arbitrade “all 

of [SION’s] ownership rights and title in the Gold which vests in [SION] pursuant to the [Safe 

Keeping Receipt].”   

32. The one page Safe Keeping Receipt issued by G4S Cash Services LLC (“G4S”), a 

company that specializes in vaulting and transport of valuable assets, was attached to the 

Assignment Agreement.   

33. The Safe Keeping Receipt does not refer to Arbitrade or to SION holding title to 

any gold of any value.   

34. Instead, it makes cryptic reference to some sort of “package” held in a vault under 

an account in SION’s name purportedly containing a gold “Certificate of Guarantee.”   

35. All of the agreements regarding this purported gold acquisition transaction were 

signed by Barber on behalf of SION.   

36. Hogg handled the negotiations between Arbitrade and SION and had the final word 

on the deal.  

37.   The agreements between Arbitrade and SION, along with the Safe Keeping 

Receipt, constitute the entire basis for Arbitrade’s claim to have acquired title to $10 billion worth 

of gold.   

38. Arbitrade never received any information from Barber or SION regarding the origin 

of the gold, the identity of the seller, or its storage location.   

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39. It is highly unlikely that the gold referred to in the Safe Keeping Receipt even exists.  

40. The “Certificate of Guarantee” and related documentation purportedly issued by 

“UBS” as referenced in the G4S Safe Keeping Receipt appear to be forgeries as they contain 

numerous spelling and punctuation errors, and significant portions are illegible.    

41. To create the appearance that the gold transaction was legitimate, Arbitrade also 

engaged the services of two accounting firms to evaluate and confirm certain details of the 

transaction.   

42. In August 2018, Arbitrade retained an accounting firm recommended by Barber, 

Elliott Davis, LLC (“Elliott Davis”), to confirm the issuance of the Safe Keeping Receipt and that 

the Assignment Agreement was properly executed and contained provisions assigning SION’s 

purported ownership rights and title to the gold to Arbitrade.   

43. Although Elliot Davis returned a report acknowledging this information, the report 

did not confirm – and Arbitrade never asked Elliot Davis to do so – whether SION actually 

possessed real, much less transferable, ownership rights or title to gold bullion.   

44. Similarly, in September 2018 Arbitrade retained BDO USA, LLP (“BDO”) 

purportedly to assess the authenticity of the Safe Keeping Receipt.   

45. Based upon Arbitrade’s request, BDO issued a report stating only that it had 

confirmed that G4S issued the Safe Keeping Receipt, after SION provided BDO with a copy of a 

document that had certified an unspecified value in holdings to G4S personnel and proof that this 

document was placed in a vault there.  BDO’s report did not confirm whether SION possessed 

ownership rights or title to gold bullion. 

46. Arbitrade, Hogg, Goldberg, and Braverman never asked Elliott Davis or BDO to 

confirm the existence, location, ownership, or origin of the gold itself.   

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47. Neither Hogg, Goldberg, nor Braverman objected to the narrow parameters of 

Elliott Davis’ work that SION dictated.   

48. Moreover, they ignored the red flag presented when SION told BDO to drop its 

request for a video conference with the G4S employee whose signature purportedly appears on the 

Safe Keeping Receipt.   

49. Arbitrade also acquiesced to SION’s requirement that Arbitrade should have no 

direct communications with G4S personnel. 

50. Around October 2018, Arbitrade tasked Braverman with hiring Bureau Veritas, a 

company that specializes in inspection and certification services, to provide an opinion about the 

existence of the gold that Arbitrade purportedly purchased from SION.   

51. Bureau Veritas refused to accept the engagement when it became clear that 

Arbitrade wanted the firm to issue its opinion without conducting any physical examination of the 

gold, with Braverman telling the firm that “[c]ounting bars I believe is overkill.”  

C. Materially False and Misleading Statements in News Releases 
Regarding the Gold Acquisition 

 
52. To increase demand for DIG on the Livecoin trading platform, beginning in around 

March 2018 and continuing until January 2019, Arbitrade and Cryptobontix engaged in a 

promotional campaign to tout the business and DIG tokens through emailed news releases and 

press releases disseminated to the public, and at least one “press conference.”   

53. During the course of this promotional activity, Arbitrade and Cryptobontix, through 

Hogg, Goldberg, Braverman, and Barber, made material misstatements or omissions in several 

releases and in the press conference concerning Arbitrade’s purported acquisition of billions of 

dollars’ worth of gold bullion.   

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54. Hogg and Goldberg reviewed and approved at least three of the false and 

misleading releases before they were issued to the public, and Hogg participated in the press 

conference.   

55. Braverman also reviewed at least one of the false press releases prior to its issuance, 

and Barber reviewed two of the releases before they went out. 

56. On May 24, 2018, Arbitrade and Cryptobontix issued an email news release 

purporting to correct various “online rumors,” including the companies’ gold acquisition plans.   

57. The news release claimed that Arbitrade was acquiring $8.7 billion worth of “four 

bullions (gold, silver, platinum, and palladium) that will back the company’s four major tokens,” 

including DIG.   

58. The news release compared this bullion acquisition to the purchase of a house with 

a mortgage, whereby Arbitrade would be receiving title to the bullion from the seller, who would 

then place a debt against the bullion under a structured financing plan over a certain period of time.   

59. According to the release, Cryptobontix and Arbitrade planned to use half of the 

daily proceeds from their crypto asset operations to pay off the debt on the $8.7 billion bullion 

purchase.   

60. The news release also claimed that investors would be able to redeem their DIG 

crypto assets for bullion. 

61. On June 28, 2018, Arbitrade held a telephonic “press conference” during which 

Hogg announced and discussed the company’s “partnership” with SION through which he claimed 

Arbitrade would be receiving title to $10 billion worth of physical gold.   

62. During this call, Hogg also stated that Arbitrade had “basically recreated the gold 

standard for the cryptocurrency sector.” 

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63. On July 5, 2018, Arbitrade and Cryptobontix issued another email news release 

announcing, among other things, Arbitrade’s “definitive deal” to acquire $10 billion in gold bullion 

from SION that will be held at a “Brinks’ vault.”   

64. This news release claimed that Arbitrade would have the title certificate to the gold 

bullion, which was described as the Safe Keeping Receipt, in hand within two weeks, and the gold 

would be “audited by a major accounting firm.”   

65. According to this release, out of the $10 billion of gold bullion acquired, $3 billion 

worth ($1.00 worth of gold for every token issued) was allocated to backing DIG, with the 

remainder allocated to Arbitrade and Cryptobontix’s alleged other crypto assets. 

66. A few months later, on November 5, 2018, Arbitrade issued a press release 

announcing that the company had received title to gold bullion worth “in excess of $10 billion,” 

which would be used to back its tokens, and that this gold was being “stored at independent security 

facilities.”   

67. In this press release, Arbitrade further claimed to have completed the required 

“regulatory gold vaulting verification compliance.”  The release also stated that an independent 

public accounting firm had “verified the account in good standing” and “confirmed” a Safe 

Keeping Receipt of the gold through “direct confirmation from the independent secure vaulting 

company.” 

68. On January 9, 2019, Arbitrade issued a press release announcing that its December 

“shipment of gold” from SION “has been vaulted and secured” in the form of an “additional $3.8m 

of hallmarked gold bars.”   

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69. The release also stated that, “[u]tilizing SION’s procurement network, Arbitrade 

ensures consistent growth of its precious metals holdings, going above and beyond the $10 billion 

announced earlier in 2018.”   

70. The release further claimed that SION had “provided $250 million in credit” to 

facilitate these purchases on Arbitrade’s behalf. 

71. The representations made in these news and press releases and the conference call 

concerning Arbitrade’s purported acquisition of billions of dollars’ worth of gold bullion were 

blatantly false and misleading.   

72. Arbitrade never acquired or received title to $10 billion in gold bullion. 

73. Moreover, no audit of the $10 billion in gold was ever performed by a major 

accounting firm as represented in the July 5, 2018, news release.   

74. BDO never audited the gold, but merely confirmed certain documentation that 

Arbitrade and SION presented to it.   

75. Likewise, the statements made in the November 5, 2018, press release regarding 

verification of the account and the Safe Keeping Receipt by an independent accounting firm are 

misleading given that Arbitrade’s title to real gold did not exist and Arbitrade never completed any 

required “gold vaulting verification compliance.” 

D. Sales of DIG on Livecoin 

76. The false and misleading news releases and conference call served to create demand 

for DIG and had a material impact on the price of DIG sales on the Livecoin trading platform.   

77. Except for the January 9, 2019, press release, each of the fraudulent releases 

resulted in a spike in the price of DIG.   

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78. For example, following the May 24, 2018, email news release, the price of DIG 

jumped from about $0.11 to $0.16 a token, an over 45% increase in price.   

79. Simultaneous with Arbitrade and Cryptobontix conducting the false promotional 

campaign, Hogg and Goldberg sold DIG tokens, which were owned by Cryptobontix, on the 

Livecoin trading platform at artificially inflated prices for proceeds totaling about $36.8 million.   

80. Between the end of 2017 and mid-2019, the entire time period during which Hogg 

and Goldberg sold DIG tokens on Livecoin, they made proceeds totaling about $45 million.   

81. Hogg and Goldberg exclusively handled all of these sales of DIG on Livecoin and 

generally sold DIG in exchange for Bitcoin.   

82. DIG investors committed funds in the form of Bitcoin or other crypto assets to 

participate in an investment opportunity. 

83. DIG investors’ fortunes were inextricably tied to the success or failure of the 

management of Cryptobontix and Arbitrade to generate a profit for investors, namely an increase 

in the value of their DIG tokens.  The fortunes of investors and the companies’ management were 

also intertwined because management held and received DIG tokens through which they expected 

to receive a profit. 

84. DIG investors’ role was limited to purchasing the DIG tokens through the Livecoin 

trading platform.  Investors had no role in the business operations of Cryptobontix or Arbitrade 

and were entirely passive.  Instead, investors relied solely on Arbitrade and Cryptobontix, and their 

management, to generate a profit for investors, namely an increase in the value of their DIG tokens.  

Investors’ expectation of those profits came from, among other things, the representations that 

Arbitrade and Cryptobontix would obtain the promised gold to back the DIG tokens, and that 

investors would be able to redeem DIG tokens for gold, of which the supply would be directly 

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dependent on the extent to which revenues were generated to fund company gold purchases.  

Investors would have also expected profits based on the success of Arbitrade’s underlying business 

ventures, including mining of crypto assets and the creation of a crypto asset trading platform and 

merchant payment platform. 

85. No registration statement was filed or in effect for the DIG tokens during the time 

of the events set forth in this Complaint.  Furthermore, no exemptions from registration are 

available, including exemptions under the Securities Act. 

86. Braverman was responsible for converting the Bitcoin proceeds of their DIG sales 

to cash through an account he had at a U.S.-based crypto asset-trading platform in the name of 

Rozgold, an entity he owned and controlled.   

87. The cash would be transferred into Rozgold’s bank account, which Braverman 

would then distribute based on instructions from Hogg or Goldberg.   

88. Braverman also retained some of the proceeds from the Bitcoin sales for himself.   

89. Braverman falsely represented to the crypto asset-trading platform that he was 

trading for the benefit of Rozgold and failed to disclose that he was in fact engaged in crypto asset 

transactions for the benefit of third parties. 

90. SION received at least $2.5 million in ill-gotten gains in the form of proceeds from 

fraudulent and unregistered sales of DIG tokens. 

91. The DIG token has since been delisted from the Livecoin trading platform as of 

February 2020, when it reached a sustained valuation of zero. 

  

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V. CLAIMS FOR RELIEF 
 

COUNT I 
Violations of Sections 5(a) and (c) of the Securities Act 

(Against Arbitrade, Cryptobontix, Hogg and Goldberg) 
 

92. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

93. No registration statement was filed or in effect with the Commission pursuant to the 

Securities Act with respect to the securities Arbitrade, Cryptobontix, Hogg and Goldberg offered 

and sold as described in this Complaint and no exemption from registration existed with respect 

to these securities. 

94. From at least May 2018 to January 2019, Arbitrade, Cryptobontix, Hogg and 

Goldberg, directly or indirectly: 

(a) made use of any means or instruments of transportation or 
communication in interstate commerce or of the mails to sell 
securities, through the use or medium of a prospectus or otherwise; 

 
(b) carried or caused to be carried securities through the mails or in 

interstate commerce, by any means or instruments of transportation, 
for the purpose of sale or delivery after sale; or 

 
(c) made use of any means or instruments of transportation or 

communication in interstate commerce or of the mails to offer to sell 
or offer to buy through the use or medium of any prospectus or 
otherwise any security, 

 
without a registration statement having been filed or being in effect with the Commission as to 

such securities. 

95. By reason of the foregoing, Arbitrade, Cryptobontix, Hogg and Goldberg violated, 

and unless enjoined, are reasonably likely to continue to violate Sections 5(a) and (c) of the 

Securities Act [15 U.S.C. § 77e(a) and (c)]. 

 
 
 

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COUNT II 
Violations of Section 17(a)(1) of the Securities Act 

(Against Hogg and Goldberg) 
 

96. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

97. From at least May 2018 to January 2019, Hogg and Goldberg, in the offer or sale 

of any securities by the use of any means or instruments of transportation or communication in 

interstate commerce or by use of the mails, directly or indirectly, knowingly or recklessly 

employed any device, scheme, or artifice to defraud. 

98. By reason of the foregoing, Hogg and Goldberg violated, and, unless enjoined, are 

reasonably likely to continue to violate, Section 17(a)(1) of the Securities Act [15 U.S.C. § 

77q(a)(1)]. 

COUNT III 
Violations of Section 17(a)(2) of the Securities Act 

(Against Hogg and Goldberg) 
 

99. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

100. From at least May 2018 to January 2019, Hogg and Goldberg, in the offer or sale 

of securities by the use of any means or instruments of transportation or communication in 

interstate commerce or by use of the mails, directly or indirectly, negligently obtained money or 

property by means of any untrue statement of a material fact or any omission to state a material 

fact necessary in order to make the statements made, in light of the circumstances under which 

they were made, not misleading.  

101. By reason of the foregoing, Hogg and Goldberg violated, and, unless enjoined, are 

reasonably likely to continue to violate, Section 17(a)(2) of the Securities Act [15 U.S.C. § 

77q(a)(2)].  

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COUNT IV 
Violations of Section 17(a)(3) of the Securities Act 

(Against Hogg and Goldberg) 
 

102. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

103. From at least May 2018 to January 2019, Hogg and Goldberg, in the offer or sale 

of securities by the use of any means or instruments of transportation or communication in 

interstate commerce or by use of the mails, directly or indirectly, negligently engaged in 

transactions, practices and courses of business which operated or would have operated as a fraud 

or deceit upon the purchasers and prospective purchasers of such securities.   

104. By reason of the foregoing, Hogg and Goldberg violated, and, unless enjoined, are 

reasonably likely to continue to violate, Section 17(a)(3) of the Securities Act [15 U.S.C. § 

77q(a)(3)]. 

COUNT V 
Violations of Section 10(b) and Rule 10b-5(a) of the Exchange Act 

(Against Arbitrade, Cryptobontix, Hogg and Goldberg) 
 

105. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

106. From at least May 2018 to January 2019, Arbitrade, Cryptobontix, Hogg and 

Goldberg, directly and indirectly, by use of any means or instrumentality of interstate commerce, 

or of the mails, knowingly or recklessly employed devices, schemes, or artifices to defraud in 

connection with the purchase or sale of securities.   

107. By reason of the foregoing, Arbitrade, Cryptobontix, Hogg and Goldberg violated, 

and, unless enjoined, are reasonably likely to continue to violate, Section 10(b) [15 U.S.C. § 

78(j)(b)] and Rule 10b-5(a) of the Exchange Act [17 C.F.R. § 240.10b-5(a)]. 

  

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COUNT VI 
Violations of Section 10(b) and Rule 10b-5(b) of the Exchange Act 

 (Against Arbitrade, Cryptobontix, Hogg and Goldberg) 
 

108. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

109. From at least May 2018 to January 2019, Arbitrade, Cryptobontix, Hogg and 

Goldberg, directly and indirectly, by use of any means or instrumentality of interstate commerce, 

or of the mails, knowingly or recklessly made untrue statements of material facts and omitted to 

state material facts necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading in connection with the purchase or sale of securities.   

110. By reason of the foregoing, Arbitrade, Cryptobontix, Hogg and Goldberg violated, 

and, unless enjoined, are reasonably likely to continue to violate, Section 10(b) [15 U.S.C. § 

78(j)(b)] and Rule 10b-5(b) of the Exchange Act [17 C.F.R. § 240.10b-5(b)]. 

COUNT VII 
Violations of Section 10(b) and Rule 10b-5(c) of the Exchange Act 

 (Against Arbitrade, Cryptobontix, Hogg and Goldberg) 
 

111. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

112. From at least May 2018 to January 2019, Arbitrade, Cryptobontix, Hogg and 

Goldberg, directly and indirectly, by use of any means or instrumentality of interstate commerce, 

or of the mails, knowingly or recklessly engaged in acts, practices and courses of business which 

operated or would have operated as a fraud or deceit upon any person in connection with the 

purchase or sale of securities.    

113. By reason of the foregoing, Arbitrade, Cryptobontix, Hogg and Goldberg violated, 

and, unless enjoined, are reasonably likely to continue to violate, Section 10(b) [15 U.S.C. § 

78(j)(b)] and Rule 10b-5(c) of the Exchange Act [17 C.F.R. § 240.10b-5(c)]. 

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COUNT VIII 
Control Person Liability under Section 20(a) of the Exchange Act for Violations of Section 

10(b) of the Exchange Act and Rule 10b-5 thereunder by Cryptobontix 
(Against Hogg) 

 
114. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

115. At all relevant times, Hogg was a control person of Cryptobontix for purposes of 

Section 20(a) of the Exchange Act [15 U.S.C § 78t(a)].  

116. As alleged above in Counts V-VII, from approximately May 2018 through January 

2019, Cryptobontix violated Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rules 

10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), and (c)].  

117. As a control person of Cryptobontix, Hogg is jointly and severally liable with and 

to the same extent as Cryptobontix for each of the violations of Section 10(b) of the Exchange Act 

[15 U.S.C. § 78(j)(b)], and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), 

and (c)].  

118. By reason of the foregoing, Hogg has violated, and unless enjoined, is reasonably 

likely to continue to violate Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rules 

10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), and (c)].  

COUNT IX 
Control Person Liability under Section 20(a) of the Exchange Act for Violations of Section 

10(b) of the Exchange Act and Rule 10b-5 thereunder by Arbitrade 
(Against Hogg and Goldberg) 

 
119. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

120. At all relevant times, Hogg and Goldberg were control persons of Arbitrade for 

purposes of Section 20(a) of the Exchange Act [15 U.S.C § 78t(a)]. 

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121. As alleged above in Counts V-VII, from approximately May 2018 through January 

2019, Arbitrade violated Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rules 10b-

5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), and (c)]. 

122. As control persons of Arbitrade, Hogg and Goldberg are jointly and severally liable 

with and to the same extent as Arbitrade for each of the violations of Section 10(b) of the Exchange 

Act [15 U.S.C. § 78(j)(b)], and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), 

(b), and (c)]. 

123. By reason of the foregoing, Hogg and Goldberg have violated, and unless enjoined, 

are reasonably likely to continue to violate Section 10(b) of the Exchange Act [15 U.S.C. § 

78(j)(b)], and Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. § 240.10b-5(a), (b), and (c)]. 

COUNT X 
Aiding and Abetting Violations of Section 10(b) and Rule 10b-5(a) of the Exchange Act 

by Cryptobontix, Arbitrade, Hogg and Goldberg 
(Against Braverman and Barber) 

 
124. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

125. As alleged above in Count V, Cryptobontix, Arbitrade, Hogg and Goldberg violated 

Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(a) thereunder [17 C.F.R. 

§ 240.10b-5(a)].  

126. From at least May 2018 to January 2019, Braverman and Barber knowingly, or with 

extreme recklessness, provided substantial assistance to, and thereby aided and abetted violations 

of Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(a) thereunder [17 

C.F.R. § 240.10b-5(a)] by Arbitrade, Cryptobontix, Hogg and Goldberg.  

127. By reason of the foregoing, pursuant to Section 20(e) of the Exchange Act [15 

U.S.C. § 78t(e)].  Braverman and Barber aided and abetted, and unless enjoined, are reasonably 

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likely to continue to aid and abet, violations of Section 10(b) of the Exchange Act [15 U.S.C. § 

78(j)(b)], and Rule 10b-5(a) thereunder [17 C.F.R. § 240.10b-5(a)].  

COUNT XI 
Aiding and Abetting Violations of Section 10(b) and Rule 10b-5(b) of the Exchange Act 

by Cryptobontix, Arbitrade, Hogg and Goldberg 
(Against Braverman and Barber) 

 
128. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

129. As alleged above in Count VI, Cryptobontix, Arbitrade, Hogg and Goldberg 

violated Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(b) thereunder 

[17 C.F.R. § 240.10b-5(b)].  

130. From at least May 2018 to January 2019, Braverman and Barber knowingly, or with 

extreme recklessness, provided substantial assistance to, and thereby aided and abetted violations 

of Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(b) thereunder [17 

C.F.R. § 240.10b-5(b)] by Arbitrade, Cryptobontix, Hogg and Goldberg.  

131. By reason of the foregoing, pursuant to Section 20(e) of the Exchange Act [15 

U.S.C. § 78t(e)].  Braverman and Barber aided and abetted, and unless enjoined, are reasonably 

likely to continue to aid and abet, violations of Section 10(b) of the Exchange Act [15 U.S.C. § 

78(j)(b)], and Rules 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)]. 

COUNT XII 
Aiding and Abetting Violations of Section 10(b) and Rule 10b-5(c) of the Exchange Act  

by Cryptobontix, Arbitrade, Hogg and Goldberg 
(Against Braverman and Barber) 

 
132. The Commission repeats and realleges Paragraphs 1 through 91 of its Complaint as 

if fully set forth herein. 

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133. As alleged above in Count VII, Cryptobontix, Arbitrade, Hogg and Goldberg 

violated Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(c) thereunder 

[17 C.F.R. § 240.10b-5(c)].  

134. From at least May 2018 to January 2019, Braverman and Barber knowingly, or with 

extreme recklessness, provided substantial assistance to, and thereby aided and abetted violations 

of Section 10(b) of the Exchange Act [15 U.S.C. § 78(j)(b)], and Rule 10b-5(c) thereunder [17 

C.F.R. § 240.10b-5(c)] by Arbitrade, Cryptobontix, Hogg and Goldberg.  

135. By reason of the foregoing, pursuant to Section 20(e) of the Exchange Act [15 

U.S.C. § 78t(e)].  Braverman and Barber aided and abetted, and unless enjoined, are reasonably 

likely to continue to aid and abet, violations of Section 10(b) of the Exchange Act [15 U.S.C. § 

78(j)(b)], and Rule 10b-5(c) thereunder [17 C.F.R. § 240.10b-5(c)]. 

COUNT XIII 
Unjust Enrichment 

(Against Relief Defendant SION) 
 

136. The Commission repeats and realleges Paragraphs 1 through 91 of this Complaint 

as if fully set forth herein. 

137. SION received at least $2.5 million in ill-gotten gains in the form of proceeds from 

fraudulent and unregistered sales of DIG tokens, to which it lacks a legitimate claim. 

138. SION obtained these funds as part of the securities law violations alleged above, 

under circumstances in which it is not just or equitable for it to retain the funds. 

139. By reason of the foregoing, SION has been unjustly enriched and must disgorge its 

ill-gotten gains. 

VI. RELIEF REQUESTED 

WHEREFORE, the Commission respectfully requests the Court find the Defendants 

committed the violations alleged and:  

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A. 

Permanent Injunctive Relief 

Issue a Permanent Injunction enjoining Defendants, their officers, agents, servants, 

employees, attorneys, and all persons in active concert or participation with them, and each of 

them, from violating the federal securities laws alleged in this Complaint.   

B. 

Disgorgement 

Issue an Order directing Defendants and Relief Defendant SION to disgorge all ill-gotten 

gains or proceeds received including prejudgment interest thereon as a result of the acts and/or 

courses of conduct alleged in this Complaint. 

C. 

Penalties 

Issue an Order directing Defendants to pay civil money penalties pursuant to Section 20(d) 

of the Securities Act [15 U.S.C. § 77t(d)] and/or Section 21(d)(3) of the Exchange Act [15 U.S.C. 

§ 78u(d)(3)]. 

D. 

Officer and Director Bar 

Issue an Officer and Director bar against Hogg, Goldberg, Braverman, and Barber pursuant 

to Section 20(e) of the Securities Act and/or Section 21(d)(2) of the Exchange Act. 

  

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E. 

Further Relief 

Grant such other and further relief as may be necessary and appropriate. 

F. 

Retention of Jurisdiction 

Retain jurisdiction over this action and over the Defendants in order to implement and carry 

out the terms of all orders and decrees that may hereby be entered, or to entertain any suitable 

application or motion by the Commission for additional relief within the jurisdiction of this Court. 

VII.  DEMAND FOR JURY TRIAL 

The Commission hereby demands a jury trial on any and all issues so triable. 

 
September 30, 2022 Respectfully submitted, 
  
 Alice K. Sum 
 
 
 

Alice K. Sum, Esq. 
Trial Counsel 
Fla. Bar No. 354510 
Direct Dial: (305) 416-6293 
Email:  [email protected]   
 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
801 Brickell Avenue, Suite 1950 
Miami, Florida 33131 
Telephone: (305) 982-6300 
Facsimile: (305) 536-4154 
 

 

Case 1:22-cv-23171-XXXX   Document 1   Entered on FLSD Docket 09/30/2022   Page 25 of 25

mailto:[email protected]