There is an overdose of Neo & Bee news lately, but we think these views on the situation are worth being shared. Two Bitcoin high-profiles came forward and shed their light. Tuur Demeester and Andreas Antonopoulos were both connected to Neo & Bee's story. Demeester was contacted by CEO Danny Brewster, hoping he would become an investor. Antonopoulos worked as a consultant for the startup. Both of them are certain of one thing. Danny Brewster is the one to blame, not the Neo & Bee employees. Andreas Antonopoulos wrote about this in a blog post while Tuur Demeester shared his views on Reddit.
Talented people, all betrayed by Danny Brewster
"When I consulted for Neo & Bee, I had the privilege of working with many talented, committed, honest and dedicated people, all of whom were betrayed by Danny; these people have found themselves without a job and with damaged reputations through no fault of their own. My goal in writing this is to offer honesty and transparency, which has always been my primary principle in business dealings, and to provide the community with some answers, however limited those may be because of my limited involvement "
Andreas Antonopoulos is astonished by the current proceedings at Neo & Bee. He was hired as a consultant by Neo & Bee in November 2013. He was approached by George Papageorgiou, COO at the company. Antonopoulos first met Papageorgiou in April 2013, when the latter one was working on his MBA about Bitcoin. Impressed by his professionalism and talents, Antonopoulos kept in touch with him until their relation became a professional one in November 2013. Papageorgiou convinced him to become a technical advisor for their Advisory Board, on a retainer basis. Right after taking this decision, Antonopoulos got in touch with Danny Brewster for the first time.
"A day or so later, I joined a call with George Papageorgiou (the COO) and Danny Brewster (the CEO) to discuss the details. This was the first time I had spoken with Danny (as far as I can remember), and he outlined his vision for Neo & Bee, specifically to create a bitcoin exchange and bitcoin services company to serve Cyprus and international consumers and institutional investors. He told me he wanted to make Cyprus a bitcoin leader, and had support from a variety of Cypriot government agencies, hinting at rapid progress in achieving regulatory “legitimacy” that would allow N&B to operate in Cyprus with the blessing and support of the local banking regulators."
After this, Antonopoulos served as a consultant for Neo & Bee. He kept his involvement rather small, due to time limitations. As we all know, he is involved with many other Bitcoin projects. He was paid a steady wage for five hours of consulting every month. In the coming months, contact was not what Antonopoulos expected of it. The company did not keep in touch, which led him to ask Brewster to review his involvement in the project. Being paid for consulting seems strange when Neo & Bee does not use the hours they are paying for. Some calls happened until Antonopoulos learned Brewster had abandoned the company.
"After returning from the conference on March 30th, I was contacted via Skype by George Papageorgiou and Øystein Aaby, the Compliance and Risk Management Officer [I am not entirely sure Øystein was the second person on that call, I had not seen Øystein in person and did not recognise him], who explained that Neo &Bee's CEO was AWOL and that the team was trying to figure out what to do to keep the company going but could not communicate publicly as they didn’t know what was going on and had no authority. I advised the team to go public as soon as possible."
Antonopoulos had some words left in his blog post about the Neo & Bee employees, who are the true victims of this case.
"It is important to note that this was the failure of one person and that the employees of Neo & Bee are victims in this company failure. Unlike investors who took risks, knowing they were risking their investment for a reward, employees do not take a position in a company as a risk venture; they do it to pay their bills and support their families. Those employees have been hurt by this, finding themselves suddenly unemployed, with unpaid paychecks and missed bills. Everyone I worked with at Neo & Bee was professional, committed, talented and passionate about bitcoin, and I have no reason to believe the mismanagement went any further than Danny. While the executives of the firm may suffer damage to their reputations, I think it is important to recognize that it is easy to see the signs in hindsight, but much harder to see them or act upon them in real life when lacking certainty and operating under a busy work schedule. It’s easy to snipe from the sidelines; it’s much harder to run a company in a fast-paced industry like bitcoin, under intense competitive pressure. I hope we can all show restraint and compassion, even if there is legitimate need for answers and explanations."
Trading while in the office
While Antonopoulos had limited contacts with Brewster, Tuur Demeester did meet the CEO in person. He was approached to invest in Neo & Bee shares and to talk at a Bitcoin expo in Cyprus. He refused the first but accepted the second offer. He flew over to Cyprus and was invited to stay at Brewster's house. During his time in Cyprus, Demeester made an extended visit to the Neo & Bee offices. He wrote about his findings on Reddit.
"In November, he contacted me again with the question whether I wanted to speak about Bitcoin at their conference in Cyprus. Originally it was planned for January, later it was pushed back to late February. I booked the flights, and they were reimbursed to me in BTC by Danny.
Danny drove a posh Bentley car that he'd imported from the UK. Once arriving at his luxurious but sparsely furnished rental home, I was greeted by his fiancé. At first I was surprised by the affluence he displayed that first day, but that faded when Danny told me he was an early Bitcoin and Litecoin adopter who'd invested thousands of his own coins into the company (since his disappearance, his personal btc wealth became very contested)."
This fits the suspicion most of the employees had. Brewster had invested lots of his own coins into Neo & Bee, which made it very difficult to keep personal and professional funds separated. Something he claims to have done without effort. Demeester was impressed by all the grandeur surrounding Neo & Bee's launch in Cyprus. He talks about Neo billboards flashing by. Brewster talked about his connections with the university, meetings with the minister of finance and other high brow people, how he had signed up a chain of 40 stores where Neo & Bee products could be offered, and more. Everything seemed to be running smoothly and, to someone with no further insight in the company, Neo & Bee looked destined for greatness.
As we all have learned by now, Brewster is very good in pretending he is a big-shot who knows what he is doing. Demeester witnessed this first-hand when Brewster started trading in his office when Bitcoin price took a dive.
"At another point during my stay, the Bitcoin price fell briefly to below $500, and when I told him about this, he set up a trade to allegedly buy over €80,000 in bitcoins while sitting in his office, taking profit a few hours later when the price had recovered. (I was at the other side of his desk, so I didn't see the actual trade happen.)"
Even not seeing the actual trade happen, it's worrying to realize Brewster was trading those amounts of money from behind his desk. Was he using his own funds or Neo & Bee's? Demeester did not look into this any further (which is only normal; every sane person would think Brewster was using his own coins) and continued his visit. He met many of Neo & Bee's employees, who struck him as professional and passionate about the company and the prospects for Bitcoin in Cyprus. On February 23rd, he wrote a friend about his time at the office: "I still need to find out whether these guys are casual geniuses, or clever cowboys". The corporate culture was relaxed and very open.
Demeester ends his views with an interesting final thought on Bitcoin investing:
"This episode has also reminded me, as I stated in my Buenos Aires talk last December, that investing in Bitcoin the currency is likely the most stable and maybe even the most profitable option going forward, because it avoids the bulk of the third party risks involved with Bitcoin ecosystem investments."
After the reading of the past two days, I tend to agree with Demeester. Almost every (if not all) failure of Bitcoin companies is due to people making mistakes. Bitcoin itself is never a problem here; it's human nature and its ability to make a series of fatal decisions. Being a CEO is hard work, you are responsible for other people's lives, as well as your company's reputation. It is of the utmost importance that a CEO knows what he is doing and why he is doing it. Some CEOs have taken decisions in the best interest of their company, unfortunately, they turned out for the worst. Other CEOs have taken decisions in their own best interest. They turned bad for all the other people involved, but the CEOs will live. In a new technology like Bitcoin, these things will happen. It's the growing pains we, unfortunately, need to get through before seeing better days. Let's hope next time we write about Neo & Bee, it will be about a solution for the people that lost money in this.
Danny Brewster is a man who knows how to clear himself of every blame. Reading his statements again, shows me he just tries to convince everyone of his own innocence. At least have the decency to stand up for your own mistakes. Apologize to everyone you harmed and try to make things right. It's the only right thing to do.