Who remembers Neo & Bee? Better still, who knows what happened after the “Bitcoin bank” fell apart in April 2014, and what has happened since? Former CEO Danny Brewster has broken a long silence to tell his side of the story.
Bitcoin’s Great Hope That Wasn’t
In 2014, Neo & Bee was Bitcoin’s great hope. Launching just weeks after Mt. Gox began to collapse, it was set to be a model for bringing cryptocurrency to the masses.
Its physical “branch” , located with the company in Cyprus, was staffed by consultants to help everyday consumers get started.
It was accompanied by a local TV and print media advertising campaign that attracted attention around the Bitcoin world. It sold share tokens on the now-defunct BTC “stockmarket” Havelock Investments in a kind of proto-ICO.
And at the center of it all was Danny Brewster, an enthusiastic young British CEO whose “stick it to the banks” attitude and accent embodied the punk spirit of early Bitcoin.
For the record, “Neo” referred to the physical branch and bitcoin exchange, while “Bee” was intended as an early bitcoin debit card. No similar services existed at the time.
After Gox, Neo & Bee Falls
Then, alarmingly quickly, it all fell apart too. Within a month the company appeared insolvent and Brewster was on the run, claiming threats were made against his family. Investors howled at their now-worthless share-tokens and branch staff were looking for new jobs.
The doubly-stunned Bitcoin world asked, what happened? Had Brewster absconded with funds? Was the whole operation a sham designed to bilk investors? Who was really behind it?
Brewster at the time denied theft allegations, claiming accounting errors and management conflicts were behind the collapse. For a while, he was pursued by the Cypriot authorities and briefly under house arrest in the U.K. Eventually all criminal investigations were dropped, though some civil matters remain unsettled.
Brewster continued to live in the U.K., advised not to discuss details. This week however, he emerged from a sometimes-painful silence to give more details about the events of 2014 and since. Long-time Bitcoiners will no doubt be curious to hear them.
Brewster has spoken at other times in the past to deny wrongdoing, mainly in 2016. However it’s only now he’s decided to tell the story in detail, and talk about future plans.
Danny Brewster Re-Appears on the Bitcoin Scene
Most surprising is the fact that Neo & Bee still exists. It’s not actually doing any business, and it never will — but the business entity still exists, still has assets, and is determined to make its investors whole again.
Brewster spoke to Bitcoin Uncensored’s Chris DeRose last weekend, and also chatted to Bitsonline. Audio of the BU interview is available on Soundcloud:
Plan to Reimburse Investors, Three Years Later
He said he never stole funds from Neo & Bee and that the company’s intentions were legitimate. Additionally, he still plans to make ordinary investors whole — despite being under no legal obligation to do so.
He has also set up a website on NeoDisrupt.com for investors to make claims.
“I have software available to me to launch every platform that Neo and Bee was working on, also one new platform that I am still debating launching in the near future myself, or building partnerships to launch with 3rd parties in multiple jurisdictions. Physical assets still exist also as the offer was made for me to sign them all over to one of the individuals that was a complainant in the original warrant (I naturally declined).”
The company was running “entirely on my directors’ loans” at the time it launched. On the day Brewster left Cyprus, he claimed there was €30,000 EUR in the physical branch office.
The Possible Reimbursement Process
Original backers bought Havelock tokens at 0.003 BTC each (roughly $1-2 USD at the time), Brewster said. He added that he made an agreement to return 0.0035 BTC before taking profits himself, however the process would be gradual. He will enable redemptions to occur at any time based on funds available on the redemption portal.
“It may be a dick move but I do believe many of the holders will redeem before reaching the 0.0035 BTC limit because these are funds they would’ve already written off. Should that occur it will accelerate the whole redemption process. I haven’t set a time limit as to when they must be claimed or redeemed by, this may change in the future though.”
Havelock Investments complicated the token sale by continuing to trade NEOBEE tokens after the insolvency, rebranding them NEOBEEQ. Those tokens also failed to gain in value.
Brewster is preparing to liquidate everything remaining at Neo & Bee, including physical assets. He will also make funds available from his current (unrelated) ventures “purely to clear up the mess and to put the whole thing to rest as quickly as possible.”
So What Went Wrong at Neo & Bee, Anyway?
Brewster said the company’s money problems began with an accounting error. He had collected paper wallets to import into digital wallet Armory, but erroneously included one that had already been swept. There was also an unspent wallet with the spent ones to be discarded.
This led to the books showing Neo & Bee with a lot more cash (or bitcoin) in hand than it actually did. Although Brewster claims the issue was eventually resolved when he retrieved his backups, it looked terrible at the time.
Things turned sour quickly after that. Brewster clashed with another “senior executive”, who had recently been demoted. That (still unnamed) person then tried to have the company remove Brewster in what he described as a “mutiny incident”. Brewster was the sole equity holder in Neo & Bee at the time.
Brewster said he received an email that implied a threat to his daughter, which appeared to come from a staff member due to the typography used in the message. He notified staff and reporters what had happened, and returned to the U.K.
The Escape That Wasn’t?
Former Neo & Bee COO George Papageorgiou posted a lengthy piece on Reddit in April 2014 with his version of events. He accused Brewster of mismanagement and of mixing his personal finances with the company’s. He also denied anyone at the company had made any threat.
Brewster, naturally, denies this. He said he broke off communication with the office, saying “I’m done, I’ll sell it off, it’ll be someone else’s problem even if it costs me everything.”
Upon his return to the U.K., the Daily Mail reported a European arrest warrant existed for him, on suspicion of fraud. The charges carried potential prison sentences of 14 years. Afraid of being arrested if he tried to travel, Brewster stayed put. He described the Daily Mail story as “full of inconsistencies”. For example, he claimed the assets he left in Cyprus were worth far more than the amount he’d supposedly absconded with.
He turned himself in to local police, who were unable to find details of any arrest warrant. They advised him to “sit still”.
“I literally sat for a year, couldn’t do anything, while I got badmouthed.”
The Authorities Intervene
For a whole year, nothing happened. Then one day police appeared at his doorstep with the warrant. That kicked off a long period of extradition hearings that went all the way to the High Court of Justice in London.
Brewster said the allegations against him sounded more civil than criminal. Then suddenly one day, the Cypriot police agreed to drop everything if he agreed to questioning. The questioning happened in the U.K., but Brewster said he (mysteriously) wasn’t permitted to have a lawyer present.
He speculated that powerful political interests in Cyprus had been embarrassed by the negative attention the case brought — and his attacks on the country’s banks during Neo & Bee’s launch.
The Cypriot authorities have not pursued any case against Brewster since that time. The European Arrest Warrant was an accusation warrant and not a charge. In fact, at no point in this story has Brewster ever been charged with a crime.
Hard Lessons Learned in Bitcoin’s Wilder Past
If Brewster’s version of the story is true, the picture is one of an inexperienced young entrepreneur trying to conquer an industry he didn’t understand as well as he thought — and put up more resistance than he expected.
Neo & Bee was a project far too ambitious for Bitcoin as it existed in 2013-14. Exchanges were still regarded as shady. Tax and financial authorities had not set any rules for digital currency use. Many big deals happened under the table. Million-dollar investments in Bitcoin companies were rare, if not unheard-of.
Could Neo & Bee have actually worked if some conditions were different? “It’s a coin flip,” Brewster said. Would he attempt to ever launch such a project again? He continued:
“Absolutely. And 99 percent of the plan would be different from the outset, together with ensuring I didn’t have people so influential with the local and national media too close to the project. So would it really be doing it all again? I wish more people would put their meat on the block and give it a go, to actually build something to benefit the space we have all found ourselves in — and I would certainly advise against doing an ICO.”
Responsibility and Payback
He still carries a grudge against certain individuals in Cyprus, but said he takes full responsibility. “The buck stops with me. Everything that fucked up is my fault.”
“Despite the anger, hatred and bitterness (understandable) shown towards me by many people in the past there have been a select few people that have been decent human beings towards me. And it is those people that I am (attempting to reimburse) mostly — together with a little fuck you to everyone that told me to hang myself.”
What do you think of Danny Brewster’s story? Let’s hear your thoughts.
Images via Neo & Bee, Cyprus Police, Daily Mail, press materials