Danny Brewster, the CEO of Neo & Bee - the first physical portal for exchanging Bitcoins - is wanted by the Cyprus police on suspicion of fraud.
Fear, uncertainty and doubt
This past Friday, the police issued an arrest warrant for Brewster who according to sources is “a person of interest in an ongoing investigation,” which is looking further into allegations from Neo & Bee customers of fraud and embezzlement.
Interestingly enough, Neo & Bee halted operations on March 28th due to “abnormal activity” as well as a “high possibility of questionable trading activity,” according to a statement published on the website of Havlock Investments, the Pass-Through Fund Manager of NEOBEE. This was presumably done as a precautionary measure to protect customers from a potential hacking attack à la Mt. Gox.
However, operations were restored back on April 4th with the website announcing:
“We have not received any formal information on the current situation at LMB Holdings. Due to those factors we have decided that the unit holders on the NEOBEE Fund should no longer be suspended from trading their units. The Fund will now be designated as NEOBEEQ to reflect the uncertainty of the future of LMB Holdings – NEO BEE Ltd. Financial information on the status of the company has not been released. The units of this Fund will continue to trade even if the company will file for bankruptcy.”
Moreover, last Sunday, the Cointelegraph reported that the embattled CEO left Cyprus citing “personal reasons.” Brewster’s official response read:
“My silence is for a very valid and personal reason, all the rumors that are flying about are false and couldn’t be further from the truth. I haven’t moved from Cyprus or anything of the kind. I am TEMPORARILY out of the country resolving some big issues that were made much worse by people stating incorrect facts in a public forum.”
Threats and accusations
In total, three complaints were officially presented against Brewster, with two of them being filed last week for amounts of €20,000 and €15,000. It remains to be seen if a Pan-European warrant will be issued as the Cypriot police did not rule out the possibility.
The last word from Brewster was on April 2nd, when he posted on a Bitcoin forum slamming accusations of embezzlement and fraud, claiming that he fled the island due to threats being received against his family and daughter, in particular.
Where is Neo?
The Cyprus Mail published the story on the front cover of its Saturday edition, with the “Where is Neo?” headline - a play on words from Neo & Bee’s marketing campaign tagline of “Who is Neo?”, which aimed to raise public awareness about crypto currencies in the island nation.
Brewster initially claimed that he left Cyprus on a “short-term temporary basis” to raise additional capital for his company “through the sale of [his] equity as we had run out of liquidity.”
As questions regarding his company’s solvency arose, Brewster made an apparent ruse by agreeing to pay around €35,000 in duties to import his Bentley, while racking up almost €1 million in debt from funding his ad campaign, employing early 20 employees as well as renting and furnishing his office space. The is no information as to whether Brewster has access to the nearly €3 million worth of bitcoins that Neo & Bee’s parent-company, LMB Holdings, has on its books.
The stock price of NEO BEE has been in a free fall since the news broke out. The stock reached its record high in late February of 0.005941 BTC upon the opening of its first (flagship) branch office in Cyprus, Nicosia. Currently, the stock price sits at 0.00007901 (~$0.04) BTC.
It has been revealed that Neo & Bee employees have not been paid their wages for the month of March. There are also reports that the entire staff resigned and is planning to take legal action against their former employer. You can follow the reddit Neo & Bee discussion, here.
Though trading was resumed back on April 4th, the transaction volume has been unsurprisingly low since the share price and market capitalization of the company have both hit rockbottom. Things aren’t looking good at all for the startup and one reddit user ominously posted, “there are huge debts and many law suits coming.”