Cyprus Mail
Business

Cyprus police issues arrest warrant for bitcoin entrepreneur

By a staff reporter

DANNY Brewster, CEO of bitcoin vendors Neo & Bee, is wanted by police on suspicion of fraud.

Police issued an arrest warrant for Brewster on Friday. Sources told the Cyprus Mail that Brewster is “a person of interest in an ongoing investigation” involving the alleged defrauding of Neo & Bee customers.

The Mail is told that so far three formal complaints have been filed against Brewster alleging he fraudulently obtained money from customers in exchange for bitcoins, which they never received.

The two earlier complaints filed last week concerned the amounts of €20,000 and €15,000.

A police source did not rule out subsequently issuing a European arrest warrant for Brewster.

Other media outlets have reported that the company halted operations late in March before its software to carry out transactions had even gone live.

Brewster dropped off the grid on April 2, when he last posted on a bitcoin forum claiming he had fled the island due to threats against his family. The entrepreneur also claimed that he reported the threats to authorities here, although police said no formal complaint was filed.

In his post, Brewster said he initially left Cyprus on a “short-term temporary basis” in order to raise additional capital for the business “through the sale of my equity as we had run out of liquidity.”

His plans changed, he added, the moment threats were made against his daughter, at which point he decided to remain abroad and to sell all of his equity in the company.

He denied claims of embezzlement, stating “every single bitcoin raised and spent is accounted for.”

Earlier, a source at Neo & Bee said they got word from Brewster on March 19 that he had gone abroad to raise capital, but didn’t hear from him since.

Bizarrely, an updated prospectus for LMB Holdings – the parent company of Neo & Bee – prepared by Brewster himself – is dated March 17, just two days prior.

Neo & Bee staff have not been paid their March wages, and it’s understood that most – if not all – have resigned.

Days before Brewster’s eyebrow-raising post on the web, Havelock Investments said it was halting trading of the Neo & Bee fund on its platform due to “abnormal activity.”

Trading in the fund has since resumed, though at very low volumes. The share price and market capitalisation of the Neo & Bee Payment Network have both plunged.

According to havelockinvestments.com, the owner and operator of Havelock Investments is the Panama Fund, a private investment company. The fund is administered by “a practicing legal license company that specialises in international business law in the Republic of Panama.”

Neo & Bee’s troubles arose barely a month after the business launched with a grand opening of its flagship store in Nicosia.

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