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

[ex-trader]

We will be profitable by march if the exchange rate increases at the rate described.

This whole proposition is so naive and risky it is untrue. It's nothing more than a free bet on Bitcoin going up taken with customer monies. As well as a huge risk of failing for this reason alone, it's almost certain that it'll be seen by the authorities as a deposit-taking institution and regulated as such, which is hugely expensive and difficult.

You simply cannot hold 98% of deposts in Euros and not be regulated. I'll state it again - deposit taking in the EU is illegal unless you are regulated. Guess what the whole issue of the requirements for regulation and illegality are utterly ignored because it's Bitcoins. Except it's not Bitcoins it's held in Euros, because as they admit 98% of people want to hold euros (or somehow try to claim it's held in Bitcoin but pegged to the euro?).

Even ignoring the regulation element, anyone who has a brain who deposits their money in this knowing about Bitcoin (and why would they if they didn't) would immediately try to withdraw their money if the BTC/Eur rate fell, since they'd know the bank could not cover all depositors - hence the classic 'run on a bank' scenario.

This is a great theoretical idea, but pegging any of it back to Euros causes it all to fail. Of course this is being done since the reality is that the depositors do not want to hold Bitcoins.

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[cryptocyprus]

wisard +1, all really good points.

I like to add few.
If you have followed, what is happening in BTC world, quarterly financial reports will not work here. Please change the contract to "once a month".
Especially, because you guys start out with a loss for a while.  PL/CF and balance sheet will do the trick.
It is also extremely important, you publish your balance sheet right after the IPVO is completed or at the end of September, which ever arrives first.
Can you do that?

Thanks for the input, we are well aware of how the Bitcoin space operates, however all of our accounts are prepared by one of the big 4 accountancy companies (name will be released on Monday) this comes at a real world cost of both time and finance. Because we are operating a real structured business and not a mining farm with very few real business requirements we cannot just speed these processes up. We can run our own reports and provide trading updates however audited accounts cannot be prepared and released monthly. If it was viable, I would do it.

[cryptocyprus]

We will be profitable by march if the exchange rate increases at the rate described.

This whole proposition is so naive and risky it is untrue. It's nothing more than a free bet on Bitcoin going up taken with customer monies. As well as a huge risk of failing for this reason alone, it's almost certain that it'll be seen by the authorities as a deposit-taking institution and regulated as such, which is hugely expensive and difficult.

You simply cannot hold 98% of deposts in Euros and not be regulated. I'll state it again - deposit taking in the EU is illegal unless you are regulated. Guess what the whole issue of the requirements for regulation and illegality are utterly ignored because it's Bitcoins. Except it's not Bitcoins it's held in Euros, because as they admit 98% of people want to hold euros (or somehow try to claim it's held in Bitcoin but pegged to the euro?).

Even ignoring the regulation element, anyone who has a brain who deposits their money in this knowing about Bitcoin (and why would they if they didn't) would immediately try to withdraw their money if the BTC/Eur rate fell, since they'd know the bank could not cover all depositors - hence the classic 'run on a bank' scenario.

This is a great theoretical idea, but pegging any of it back to Euros causes it all to fail. Of course this is being done since the reality is that the depositors do not want to hold Bitcoins.

Thanks, as previously mentioned in the thread, due to our model a "run" during a decrease in the exchange rate would reduce our liabilities.

With regards to the legislation, we are now commencing the official lobbying process as previously detailed. Bitcoin is a protocol, that can be utilised in many ways, I do not need to explian that especially on here of all places. We are first and foremost providing access to using Bitcoin as a way to utilise the cryptographic elements to ensure the customer has control of their funds and they are not using it as a purely speculative asset.

Essentially we could have created our own alt, sold it locally in exchange for Euros, however Bitcoin can offer so much more globally than taking said option and it wouldn't be decentralised and still subjected to the current regulations you described above.

The volatility is something only volume will change and we are addressing this on a large scale not only ourselves but opening up other platforms to Bitcoin.

[EskimoBob]

wisard +1, all really good points.

I like to add few.
If you have followed, what is happening in BTC world, quarterly financial reports will not work here. Please change the contract to "once a month".
Especially, because you guys start out with a loss for a while.  PL/CF and balance sheet will do the trick.
It is also extremely important, you publish your balance sheet right after the IPVO is completed or at the end of September, which ever arrives first.
Can you do that?

Thanks for the input, we are well aware of how the Bitcoin space operates, however all of our accounts are prepared by one of the big 4 accountancy companies (name will be released on Monday) this comes at a real world cost of both time and finance. Because we are operating a real structured business and not a mining farm with very few real business requirements we cannot just speed these processes up. We can run our own reports and provide trading updates however audited accounts cannot be prepared and released monthly. If it was viable, I would do it.

EDIT: (fixed my wording)
LOL... Monthly statements do not need auditing. Sorry to be so blunt, but this is a flat out lie form either you or your accounting firm that they can not produce monthly statements. I use accounting firms all the time and this is BS!

If you are willing to operate your "bank" while blind for 3 months, you got some ugly fuck-ups coming.

If your accountant is telling you, she/he can not give you monthly, she is actually telling you: "I will be updating your ledger (entering transactions - manually or importing) once in 3 months, because we have better things to do .. like drink coffee"
As you probably understand, this is utter BS!  
Please, avoid accounting firms, who expect you to fly blind for 3 months.

[ex-trader]

Please answer the following simple question:

I deposit 100 euros into an account with you. At the point of this the BTC/EUR rate is 100:1 for example. Does my deposit statement show I own 100euros or 1 BTC??

If I own 100euros, you are deposit-taking institution holding Euros and MUST operate under the same rules as all other financial institutions in the EU.

If my account shows 1 BTC, then you may well only be an exchange-house and may avoid some regulations by operating only in Bitcoin, but you cannot profit from rises in BTC/EUR values, so your financial model is completely inaccurate.

Which of these two is it?

[Vexual]

Whats next, a new nuclear power plant in Fukushima, backed by bitcoin?

[237]

Whats next, a new nuclear power plant in Fukushima, backed by bitcoin?

And so the trolls have arived here too. It's like a plague.

I'm glad, that Amsterdam will most likely offer a serious surrounding for discussion without underaged
trolls with .05 BTC as "fortune"

[cryptocyprus]

We can run our own reports daily or hourly, never said otherwise. We will happily provide regular monthly updates from our own figures but all official accounts will be provided quarterly.  We are not exactly using a small or medium accountancy firm either. These guys have a very big influence on the regulators.

So to be clear our updates will be made at more regular intervals and our audited accounts less frequently.  I would be welcoming of any recommendations of an accountancy firm, that has the same impact and respect with the regulators, that you may be aware of here in Cyprus or even better if they operate on a global scale.

[runam0k]

Agree that requiring audited accounts on a monthly basis is unreasonable.

[EskimoBob]

We can run our own reports daily or hourly, never said otherwise. We will happily provide regular monthly updates from our own figures but all official accounts will be provided quarterly.  We are not exactly using a small or medium accountancy firm either. These guys have a very big influence on the regulators.

So to be clear our updates will be made at more regular intervals and our audited accounts less frequently.  I would be welcoming of any recommendations of an accountancy firm, that has the same impact and respect with the regulators, that you may be aware of here in Cyprus or even better if they operate on a global scale.

Agree that requiring audited accounts on a monthly basis is unreasonable.

I never asked for a monthly audit  
Can you please update your contract, stating that monthly (unaudited) reports (and what reports) will be published and by what date.
I think PL, CF and balance sheet are not too much to ask and are vital for understanding, what is going on.
Cheers!

[ex-trader]

Repeated....

Please answer the following simple question:

I deposit 100 euros into an account with you. At the point of this the BTC/EUR rate is 100:1 for example. Does my deposit statement show I own 100euros or 1 BTC??

If I own 100euros, you are deposit-taking institution holding Euros and MUST operate under the same rules as all other financial institutions in the EU.

If my account shows 1 BTC, then you may well only be an exchange-house and may avoid some regulations by operating only in Bitcoin, but you cannot profit from rises in BTC/EUR values, so your financial model is completely inaccurate.

Which of these two is it?

[cryptocyprus]

Repeated....

Please answer the following simple question:

I deposit 100 euros into an account with you. At the point of this the BTC/EUR rate is 100:1 for example. Does my deposit statement show I own 100euros or 1 BTC??

If I own 100euros, you are deposit-taking institution holding Euros and MUST operate under the same rules as all other financial institutions in the EU.

If my account shows 1 BTC, then you may well only be an exchange-house and may avoid some regulations by operating only in Bitcoin, but you cannot profit from rises in BTC/EUR values, so your financial model is completely inaccurate.

Which of these two is it?

Didn't see this question. As explained elsewhere we are to put it simply, we are an exchange, that offers a wallet service and a payment gateway.

The wallets for those that wish to peg their wallet to a euro value are going to see a fluctuating amount of BTC in their wallet.

[ex-trader]

Didn't see this question. As explained elsewhere we are to put it simply, we are an exchange, that offers a wallet service and a payment gateway.

The wallets for those that wish to peg their wallet to a euro value are going to see a fluctuating amount of BTC in their wallet.

No you are not an exchange. An exchange sells Bitcoins for Euros and then tells the customer how many Bitcoins they own. Your concept of 'pegging' the value of Bitcoin is NOT something an exchange does. You are then offering to fix the value of their deposit in it's original euro amount and somehow then report to them that their Bitcoins have magically grown or shrunk in numbers.

I'll ask it again, it's very simple -  I invest 100 euros with you, what does my online or paper statement show that I own 100 euros or 1 Bitcoin?? This is a basic fundamental of your business.

[oxideNL]

Edit, Øystein will be in Amsterdam with me, so anyone can meet him there and check his passport.

Well,. I think that wouldn't be necessary.
But if others would like to see this verified,. I'll volunteer going to Amsterdam (3 hour drive)
If those people volunteer donating Travel(train) expenses.

Ofc, you"ll still have to trust me when i say " All checks out"

I can bring a heart monitor too, to provide evidence I am still alive.  
If you do go to the conference, please grab me (nicely) and say hi.

I'll take a blood sample as well.
To determine if your indeed human as you claim.
Of course I'll say Hi! first.

[ex-trader]

If you deposited €100 into a pegged account this would display €100 on your statement. This does not mean we are holding Euro deposits but simply that the balance of btc in the account in denominated in Euros. As the btc/Euro rate rises and falls adjustments will be made to the underlying Btc balance to ensure its Worth is €100. It's expected that 98% of the accounts will be pegged accounts

The statment is in Euros, you are in effect holding Euros, nothing to do with Bitcoins whatsoever, as Bitcoins are not pegged to Euros. The regulators will see through that.

Do you intend to actually give the customer access to Bitcoins or the details of the Bitcoins they own, or just suggest that somehow their Euros are invested in Bitcoins 'behind the scenes'?

[cryptocyprus]

The answer to the latter is detailed within the prospectus. We are going to be very clear to our customers we will also provide a link for them to see their BTC sat in the blockchain.

Our customers will transact in Bitcoin values with the equivalent in Euros displayed, just how almost every other business that accepts Bitcoin does.

We know where we stand with regards to Cypriot law (The most important one for ourselves) as with everything with this new technology  it is requiring legal definitions. So we are the ones lobbying for change.

[kcirazy]

There is a big difference between holding bitcoins In a Euro denominated account and holding euros.

Only for you, not for the customer.

Most wallet services such as Blockchain.info will allow you to see your balance as USD equivalent. This does not mean they are holding USD deposits.

They are clear however about the fact that your main balance is in bitcoins.
The euro/usd amount is just there for convenience.

[cryptocyprus]

There is a big difference between holding bitcoins In a Euro denominated account and holding euros.

Only for you, not for the customer.

Most wallet services such as Blockchain.info will allow you to see your balance as USD equivalent. This does not mean they are holding USD deposits.

They are clear however about the fact that your main balance is in bitcoins.
The euro/usd amount is just there for convenience.

That is something we are making very clear to our customers.

[gurcani]

from what I undesrtand, approximately 2 million shares is sold at the IPO. Is this out of the 9 million offered?

I can see that 6 million was actually offered in BTCT, BF and HL. I assume the rest (3 million) is waiting to be offered to whichever runs out of them first. Ok, there is this business of BTCT and HL being passthrough. But I assume they are seperate sells (i.e. the sells at BTCT do not contribute to the apparent volume on BF).

Is this a realistic description of what is going on?

does this mean the market reaction wasn't so favorable?

[fr33d0miz3r]

from what I undesrtand, approximately 2 million shares is sold at the IPO. Is this out of the 9 million offered?

I can see that 6 million was actually offered in BTCT, BF and HL. I assume the rest (3 million) is waiting to be offered to whichever runs out of them first. Ok, there is this business of BTCT and HL being passthrough. But I assume they are seperate sells (i.e. the sells at BTCT do not contribute to the apparent volume on BF).

Is this a realistic description of what is going on?

does this mean the market reaction wasn't so favorable?

22% sold in 24 hours. I think it's very favorable