[IPVO] [Multiple Exchanges] Neo & Bee - LMB Holdings

[cryptocyprus]

This looks fantastic! Definitely will be investing in this.

Thanks, if you have any questions, please do post them and I will answer them as quickly as I can.

Inside the prospectus I read:

Funding Risks
We require 14,097 BTC to get to market: failure to sell the full balance of shares would
result in the sacrifice of the second branch at start­up and the implementation of systems that
allow residents of other EU countries to sign up and open an account online. Also, the banks
operating reserves would be reduced.

But when I do the math, you plan to raise :

Pre­IPVO Offering ­ 500,000 Shares (5.2%) @ 0.0025 BTC each = 1250 BTC
Public Offering ­ 8,000,000 Shares (83,3%) @ 0.003 BTC each = 24 000 BTC

Why so much funds (+25K) raised via the IPO ? I don't get it.

Great idea, however.

Any additional funds raised over and above our expenditure will be working capital, the more we have in reserve initially, the stronger our position is in relation to additional branches and protecting against falls in the exchange rate of EURBTC. We will also have the added option of opening a third branch in Limassol should the IPVO sell out.

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[cryptocyprus]

Will they be utilizing Bitcoin ATMs?

We have no immediate plans to utilize the existing Bitcoin ATM hardware that is available, however we will never rule any possibility out for the future.

[btceic]

This looks fantastic! Definitely will be investing in this.

Thanks, if you have any questions, please do post them and I will answer them as quickly as I can.

Inside the prospectus I read:

Funding Risks
We require 14,097 BTC to get to market: failure to sell the full balance of shares would
result in the sacrifice of the second branch at start­up and the implementation of systems that
allow residents of other EU countries to sign up and open an account online. Also, the banks
operating reserves would be reduced.

But when I do the math, you plan to raise :

Pre­IPVO Offering ­ 500,000 Shares (5.2%) @ 0.0025 BTC each = 1250 BTC
Public Offering ­ 8,000,000 Shares (83,3%) @ 0.003 BTC each = 24 000 BTC

Why so much funds (+25K) raised via the IPO ? I don't get it.

Great idea, however.

The purpose of an IPO is to raise as much funds as possible for the company, not for investors to become rich.

When companies come public on existing exchanges (nasdaq, nyse, amex, etc) and have huge pops on the day of the IPO, are successful for the investors but not for the company coming public.

When this happens it means that the IPO was NOT priced correctly because it left allot of money on the table that could have gone to the company trying to raise funds for itself to grow.

[Deprived]

How are you planning to hedge against a heavy fall in the BTC/EUR rate?  I'm not aware of any cheap high-volume means to do so (other than converting into fiat which would be rather pointless).

Your plan pretty much relies on BTC rising vs EUR.  Whilst I'd tend to agree that long-term that seems likely it's also likely that any such rise won't be a steady one but will have the occasional large bubble + collapse.

If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you.  Whilst you may hope your own purchases could extend the bubble you can't really base a whole business plan on hoping BTC doesn't have a collapse shortly after you start taking deposits (if it happens later then it isn't such a big problem - after a while only a total collapse of BTC would be a major issue for you).

It's certainly an interesting business model - borrow money denominated in EUR then bet it all on BTC rising.  And rather than paying interest for the loans to speculate with, charge them fees for the privilege.

[stenkross]

This is fantastic!
I will be keeping my fingers crossed for Danny & co with this venture, although I do not expect the path to be free from bumps...

This could be huge for whole bitcoin community if it works out well!

[cryptocyprus]

How are you planning to hedge against a heavy fall in the BTC/EUR rate?  I'm not aware of any cheap high-volume means to do so (other than converting into fiat which would be rather pointless).

Your plan pretty much relies on BTC rising vs EUR.  Whilst I'd tend to agree that long-term that seems likely it's also likely that any such rise won't be a steady one but will have the occasional large bubble + collapse.

If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you.  Whilst you may hope your own purchases could extend the bubble you can't really base a whole business plan on hoping BTC doesn't have a collapse shortly after you start taking deposits (if it happens later then it isn't such a big problem - after a while only a total collapse of BTC would be a major issue for you).

It's certainly an interesting business model - borrow money denominated in EUR then bet it all on BTC rising.  And rather than paying interest for the loans to speculate with, charge them fees for the privilege.

We shall be operating our own local index based on several determining factors to prevent bubbles having a detrimental effect on our operations, these bubbles will also provide us with the opportunity to strengthen our own position.

We are providing a way for our customers to utilize aspects of the Bitcoin protocol that meets all of their current desires, to lock funds away from potential future bail-ins. We shall also be providing a way for them to freely access their money both online and in retail outlets, this also opens up electronic payments to many merchants that are only offered high fees and long settlement terms by the traditional merchant account providers.  We also have products planned that will provide part of an gains back to the customer.

[floatyfish]

Have you thought of using businesses like Crypto Financial at all to either expand your business or buy/sell bitcoins?

[cryptocyprus]

This is fantastic!
I will be keeping my fingers crossed for Danny & co with this venture, although I do not expect the path to be free from bumps...

This could be huge for whole bitcoin community if it works out well!

Thank you stenkross, we have the people capable to iron out any of these bumps when they arise.

[StarenseN]

How are you planning to hedge against a heavy fall in the BTC/EUR rate?  I'm not aware of any cheap high-volume means to do so (other than converting into fiat which would be rather pointless).

Your plan pretty much relies on BTC rising vs EUR.  Whilst I'd tend to agree that long-term that seems likely it's also likely that any such rise won't be a steady one but will have the occasional large bubble + collapse.

If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you.  Whilst you may hope your own purchases could extend the bubble you can't really base a whole business plan on hoping BTC doesn't have a collapse shortly after you start taking deposits (if it happens later then it isn't such a big problem - after a while only a total collapse of BTC would be a major issue for you).

It's certainly an interesting business model - borrow money denominated in EUR then bet it all on BTC rising.  And rather than paying interest for the loans to speculate with, charge them fees for the privilege.

As investor, this is my main concern also. The prospectus is over bullish about BTC Price.

I think it would be safer and wiser for you to talk about a price average like MA100 on Daily charts for example, the rate is at 106.81$. Check it here: blue line > https://www.tradingview.com/x/kO45AAG2/

Don't you ?

[kingcrimson]

If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you.  

That is my worry, how can they prevent this?

[Deprived]

How are you planning to hedge against a heavy fall in the BTC/EUR rate?  I'm not aware of any cheap high-volume means to do so (other than converting into fiat which would be rather pointless).

Your plan pretty much relies on BTC rising vs EUR.  Whilst I'd tend to agree that long-term that seems likely it's also likely that any such rise won't be a steady one but will have the occasional large bubble + collapse.

If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you.  Whilst you may hope your own purchases could extend the bubble you can't really base a whole business plan on hoping BTC doesn't have a collapse shortly after you start taking deposits (if it happens later then it isn't such a big problem - after a while only a total collapse of BTC would be a major issue for you).

It's certainly an interesting business model - borrow money denominated in EUR then bet it all on BTC rising.  And rather than paying interest for the loans to speculate with, charge them fees for the privilege.

We shall be operating our own local index based on several determining factors to prevent bubbles having a detrimental effect on our operations, these bubbles will also provide us with the opportunity to strengthen our own position.

How does having your own local index protect against exchange-rate movement?

Customer deposits Euro and wants a Euro-denominated account.  You can't use a local index to change how many Euros he deposits.
You then purchase BTC.  It doesn't matter what your index says, you have to buy them at market rate from someone selling them.
BTC then crashes vs Euro.
How does your index protect against that?

I can see your own index helping you when people deposit Euros and want a BTC-denominated account, but by your own estimates 98% of accounts will be Euro-denominated.  The 2% that are BTC-denominated can't provide useful hedging for the other 98% of customers no matter what your index says.

[cryptocyprus]

Have you thought of using businesses like Crypto Financial at all to either expand your business or buy/sell bitcoins?

I have spoken with Crypto Financial whilst we were developing the business, we have and will continue to explore many different avenues in relation to the growth and strengthening of our business.

[astutiumRob]

Announcing the upcoming public offering for LMB Holdings, which will take place in a coordinated release across multiple bitcoin securities exchanges. LMB Holdings seeks to raise capital to fund two complimentary new ventures: Neo and the Bee Payment Network.

Why have you registered the company in the UK when it's target market is Cyprus ?

What are the real reasons behind the 'virtual entity' nonsense when you could be selling the real shares in the real legal entity ?

Bee looks like it will never make a profit - so why are you bothering to setup something that is expected to lose a million EUR a year ?

Where in the prospectus have you accounted for the costs and deposit requirements of your banking licences ?


IMHO it's a good 1st draft, but still needs a *lot* of detail and work:
You rely on the BTC 'price' growing too much - there is neither an expectation or g'tee this will ever happen.
There are better options for AML/KYC than a 75k licence - SaaS services from IFS for example.

[cryptocyprus]

How are you planning to hedge against a heavy fall in the BTC/EUR rate?  I'm not aware of any cheap high-volume means to do so (other than converting into fiat which would be rather pointless).

Your plan pretty much relies on BTC rising vs EUR.  Whilst I'd tend to agree that long-term that seems likely it's also likely that any such rise won't be a steady one but will have the occasional large bubble + collapse.

If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you.  Whilst you may hope your own purchases could extend the bubble you can't really base a whole business plan on hoping BTC doesn't have a collapse shortly after you start taking deposits (if it happens later then it isn't such a big problem - after a while only a total collapse of BTC would be a major issue for you).

It's certainly an interesting business model - borrow money denominated in EUR then bet it all on BTC rising.  And rather than paying interest for the loans to speculate with, charge them fees for the privilege.

We shall be operating our own local index based on several determining factors to prevent bubbles having a detrimental effect on our operations, these bubbles will also provide us with the opportunity to strengthen our own position.

How does having your own local index protect against exchange-rate movement?

Customer deposits Euro and wants a Euro-denominated account.  You can't use a local index to change how many Euros he deposits.
You then purchase BTC.  It doesn't matter what your index says, you have to buy them at market rate from someone selling them.
BTC then crashes vs Euro.
How does your index protect against that?

I can see your own index helping you when people deposit Euros and want a BTC-denominated account, but by your own estimates 98% of accounts will be Euro-denominated.  The 2% that are BTC-denominated can't provide useful hedging for the other 98% of customers no matter what your index says.

Our local index will determine the price the Bitcoins flowing between our customers when depositing and withdrawing, this will be determined on long averages, our purchase price, how efficiently we can liquidate our own positions to ensure sufficient cash flow to cover larger withdrawals, customer behavioral trends.

If the price drops considerably quickly it will take time to filter through the averages until it reaches the front line, this additional time will enable us to take advantage of trading conditions to strengthen our position.

[statdude]

"IPVO". I like that.

[dexX7]

When does it start? Do you plan to release shares on the different exchanges at the same time?

[cryptocyprus]

Announcing the upcoming public offering for LMB Holdings, which will take place in a coordinated release across multiple bitcoin securities exchanges. LMB Holdings seeks to raise capital to fund two complimentary new ventures: Neo and the Bee Payment Network.

Why have you registered the company in the UK when it's target market is Cyprus ?

What are the real reasons behind the 'virtual entity' nonsense when you could be selling the real shares in the real legal entity ?

Bee looks like it will never make a profit - so why are you bothering to setup something that is expected to lose a million EUR a year ?

Where in the prospectus have you accounted for the costs and deposit requirements of your banking licences ?


IMHO it's a good 1st draft, but still needs a *lot* of detail and work:
You rely on the BTC 'price' growing too much - there is neither an expectation or g'tee this will ever happen.
There are better options for AML/KYC than a 75k licence - SaaS services from IFS for example.

The UK has set taxation guidelines on Bitcoin operations. The subsidiaries are being registered in every European jurisdiction.

The virtual entity is to ensure current American SEC regulations are not being broken by investors from America.

Bee provides a necessary way to allow people the ability to spend their money, something that is not easily done with capital controls. Merchants will also be a driving force towards the adoption of Neo accounts, due to the added benefits of faster settlement times and lower transaction fees.

We currently do not require a Banking License, we are lobbying the Attorney General, Minister of Finance and Minister of Commerce directly to establish a legal framework for Bitcoin based businesses to operate within. Being a small enough island it is easily possible to gain access to these individuals (Something we have already done). The added benefits of the creation of this framework for both Cyprus as a country and our business will be big. Cyprus will attract more international investment fom capital being raised by Bitcoin businesses looking for a suitable jurisdiction to establish themselves within and the PR benefits to ourselves will only be positive locally.

Initially we do rely upon the price growing, but we have conservatively estimated our projected deposits. This is the big step towards achieving what most of the Bitcoin world "thought" was going to happen during the time of the bank holiday in late March, early April this year. It was never going to happen because 1) The banks were closed 2) Very few people knew what Bitcoin was 3) People just don't spend as much time on the internet here.

We are addressing number 2 directly but making it user friendly, For number 1, the people have been taking their money out of the bank at the €300 per day rate and number 3 will not need to change, although we already have made progress with increasing eCommerce which will increase the internet usage of the general population. (More on this will be released shortly).

We are still determining the AML/KYC solution that we shall proceed with.

[Deprived]

How are you planning to hedge against a heavy fall in the BTC/EUR rate?  I'm not aware of any cheap high-volume means to do so (other than converting into fiat which would be rather pointless).

Your plan pretty much relies on BTC rising vs EUR.  Whilst I'd tend to agree that long-term that seems likely it's also likely that any such rise won't be a steady one but will have the occasional large bubble + collapse.

If BTC happens to be at the top of a bubble when you launch it could be rather a problem for you.  Whilst you may hope your own purchases could extend the bubble you can't really base a whole business plan on hoping BTC doesn't have a collapse shortly after you start taking deposits (if it happens later then it isn't such a big problem - after a while only a total collapse of BTC would be a major issue for you).

It's certainly an interesting business model - borrow money denominated in EUR then bet it all on BTC rising.  And rather than paying interest for the loans to speculate with, charge them fees for the privilege.

We shall be operating our own local index based on several determining factors to prevent bubbles having a detrimental effect on our operations, these bubbles will also provide us with the opportunity to strengthen our own position.

How does having your own local index protect against exchange-rate movement?

Customer deposits Euro and wants a Euro-denominated account.  You can't use a local index to change how many Euros he deposits.
You then purchase BTC.  It doesn't matter what your index says, you have to buy them at market rate from someone selling them.
BTC then crashes vs Euro.
How does your index protect against that?

I can see your own index helping you when people deposit Euros and want a BTC-denominated account, but by your own estimates 98% of accounts will be Euro-denominated.  The 2% that are BTC-denominated can't provide useful hedging for the other 98% of customers no matter what your index says.

Our local index will determine the price the Bitcoins flowing between our customers when depositing and withdrawing, this will be determined on long averages, our purchase price, how efficiently we can liquidate our own positions to ensure sufficient cash flow to cover larger withdrawals, customer behavioral trends.

If the price drops considerably quickly it will take time to filter through the averages until it reaches the front line, this additional time will enable us to take advantage of trading conditions to strengthen our position.

I see a lot of words there but no real meaning.

When someone withdraws their euros there's no "flowing between customers" - you have to sell Bitcoins to recover their euros.

You can pretend on paper that you still have enough BTC to cover euro-denominated deposits (by using an internal exchange-rate that isn't in track with the market) but you can't actually sell your BTC onto the open market at that internal index price.

The scenario I'm looking at is the typical bubble one - think of what happened earlier this year.  BTC rose up to $250+ vs USD then collapsed down to $100 very rapidly and stayed there for months (dipping even lower on occasions).  If you had 5 million euros on deposit with you and 1 million euros float and BTC halved vs the euro then at best you'd only have 3.5 million euros worth of realisable fiat.  i.e. you'd be insolvent.

Pretending BTC was still worth $250 doesn't solve that.  And as soon as customers notice and start withdrawing the deficit grows as every withdrawal has to be covered by selling BTC at the real price not some pretend index.

And what does "this additional time will enable us to take advantage of trading conditions to strengthen our position" mean?  You claim you'd be unable to even move the BTC around without customers signing transactions - so how can you trade with them?

[ardana123]

Pardon my ignorance, but doesn't a Bitcoin bank completely go against the concept of Bitcoin? Centralizing something that wants to be decentralized.

[Deprived]

The UK has set taxation guidelines on Bitcoin operations.

Yeah - and they're very convenient ones as well : effectively Bitcoin profits don't have to be declared for tax until they're converted to fiat.  Which allows payment of dividends to virtual shareholders pre-tax.