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

[Deprived]

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'?

I thought the same as you - until I read the prospectus.

When you 'deposit' euros with them what's actually happening is that:

1.  They're selling you bitcoins - which are held in an address that is specifically yours.
2.  If you choose to leave the bitcoins with them then thereafter the amount of bitcoins in that address are adjusted so as to always have a value equivalent to the euros you deposited.
3.  They agree to buy the bitcoins back from you at their current value at any time.

Because they immediately sell you bitcoins, for it to be a banking arrangement bitcoins would need to be considered currency.  But at present Cyprus are explicit that bitcoins are NOT currency.  So whilst they're holding SOMETHING on your behalf it isn't the type of something (currency) which requires a banking licence according to the relevant authorities.

That's the theory anyway - and they've been told it's fine.  Which I have no reason to disagree with.  It may SEEM like it's a pretence to avoid admitting that they're running an unlicenced bank - however any such pretence is only occurring at the request of the authorities who would be the ones to complain if they believed it WAS an unlicensed bank.

If the very people who are responsible for regulating banks say "That isn't a bank because bitcoins aren't money" then you have a pretty sound basis for believing you're fine with them.  Doubly so if you're the ones saying "but we WANT bitcoins to be treated as currency and for us to be able to register as a deposit-receiving institution" - which IS what these guys are saying.

It'll be interesting to see the contracts for customers.

[crumbs]

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'?

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

Not sure, but i might have just hit paydirt.
I want to run a bank, but don't want to deal with the associated regulations.  Here's my plan:

1.  I open a storefront where people can buy tokens.
2.  People are asked to start an account, with a wallet where their money is stored.
3.  From the aforementioned wallet, the account holders may purchase my tokens.  Or not.
4.  Account holders may withdraw money from their account wallet at any time, and deposit money into the wallet at any time.
5.  Similarly, they may invest in my tokens at any time, or divest from them at any time.
6.  My tokens have but one quality -- their value, relative to fiat, goes up by ~5% a year.

Can i do this

Sorry if OT.

[Peter Lambert]

Not sure, but i might have just hit paydirt.
I want to run a bank, but don't want to deal with the associated regulations.  Here's my plan:

1.  I open a storefront where people can buy tokens.
2.  People are asked to start an account, with a wallet where their money is stored.
3.  From the aforementioned wallet, the account holders may purchase my tokens.  Or not.
4.  Account holders may withdraw money from their account wallet at any time, and deposit money into the wallet at any time.
5.  Similarly, they may invest in my tokens at any time, or divest from them at any time.
6.  My tokens have but one quality -- their value, relative to fiat, goes up by ~5% a year.

Can i do this

Sorry if OT.

I think that might depend on where you live and what sorts of laws they currently have.

The OP is in Cyprus, and they are operating under the Cyprus law which allows what they are doing.

[cryptocyprus]

Not sure, but i might have just hit paydirt.
I want to run a bank, but don't want to deal with the associated regulations.  Here's my plan:

1.  I open a storefront where people can buy tokens.
2.  People are asked to start an account, with a wallet where their money is stored.
3.  From the aforementioned wallet, the account holders may purchase my tokens.  Or not.
4.  Account holders may withdraw money from their account wallet at any time, and deposit money into the wallet at any time.
5.  Similarly, they may invest in my tokens at any time, or divest from them at any time.
6.  My tokens have but one quality -- their value, relative to fiat, goes up by ~5% a year.

Can i do this

Sorry if OT.

I think that might depend on where you live and what sorts of laws they currently have.

The OP is in Cyprus, and they are operating under the Cyprus law which allows what they are doing.

We are actually saying to the regulators is that we want you to recognize Bitcoin as money, we want regulations to be created for us to operate within, that are fitting for what we are doing. I will be providing details in relation to the exact process and the steps we are taking by Tuesday.

In relation to creating a token, that would the have a central issuer, if people gave that token value for you to store and to use it as a medium of exchange you would be subjected to the Electronic Money Law, but because Bitcoin doesn't have a central issuer, the current electronic money law doesn't cater for it.

[Stuartuk]

I have one major issues with your Neo modus operandi.

What makes you think thousands of - lets face it impoverished - Cypriots are going to put their savings into Bitcoin via your bank deposit account and happily sit back and watch the value of Bitcoin rise but the value of their savings stay static?

If someone feels they want to invest in BTC they will hold BTC directly so that they benefit from the rising value of the currency against FIAT. With a Neo account, the rise of BTC value against FIAT is not felt and so they could potentially end up 100% out of pocket after a few months.

If I were a customer who walked into your branch and I asked you why should I put my 5k EUR into your bank when BTC is gaining in value by 5-10% a month what will you say to me?

[Deprived]

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'?

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

Not sure, but i might have just hit paydirt.
I want to run a bank, but don't want to deal with the associated regulations.  Here's my plan:

1.  I open a storefront where people can buy tokens.
2.  People are asked to start an account, with a wallet where their money is stored.
3.  From the aforementioned wallet, the account holders may purchase my tokens.  Or not.
4.  Account holders may withdraw money from their account wallet at any time, and deposit money into the wallet at any time.
5.  Similarly, they may invest in my tokens at any time, or divest from them at any time.
6.  My tokens have but one quality -- their value, relative to fiat, goes up by ~5% a year.

Can i do this

Sorry if OT.

That would be fine provided:

1.  You aren't issuing the tokens yourself or in collusion with someone else.
2.  You're actually buying tokens to hold on their behalf with the euros you receive.
3.  You can get a ruling from relevant authorities that the tokens aren't currency.

You need to be doing something with their euros other than just holding them.  And whatever that something you do is, it has to actually be occurring - not just be a pretence of doing something.  So long as you're doing that then you're fine - that's how things like holding companies for precious metals work.

There's a few other things that I believe you have to do as well - which is why I'm looking forward to seeing the contracts for customers (for example I don't believe they could GUARANTEE to return same euro value - though I could be wrong on that).

[pedrog]

I think that might depend on where you live and what sorts of laws they currently have.

The OP is in Cyprus, and they are operating under the Cyprus law which allows what they are doing.

Please don't quote or feed the trolls.

[ex-trader]

OK, so now you've confirmed that they will hold Bitcoins and you'll be showing them in the blockchain. As you say you're merely showing them what they're worth in euros. I get that now. Maybe this will get around regulation and lets assume for a minute that it does.

Here's the REAL problem.

You take 10m euros of deposits when it is 100:1, so buy 100,000 Bitcoins. You can then show them to the customers - everybody is happy etc.

Now the rate falls to 80:1, just the sort of movement that has happened regularly many times in recent months. If they want to have the same amount in Euros as you've promised to the customers , you need to show them that there are now 125,000 bitcoins owned by them in the blockchain, since 125,000 = 10m euros.

Where do these extra 25,000 bitcoins suddenly come from?

Please explain.

[crumbs]

Thank you all for your replies, could be a great topic in itself, but i won't derail this thread any longer.
Best of luck.

[pedrog]

OK, so now you've confirmed that they will hold Bitcoins and you'll be showing them in the blockchain. As you say you're merely showing them what they're worth in euros. I get that now. Maybe this will get around regulation and lets assume for a minute that it does.

Here's the REAL problem.

You take 10m euros of deposits when it is 100:1, so buy 100,000 Bitcoins. You can then show them to the customers - everybody is happy etc.

Now the rate falls to 80:1, just the sort of movement that has happened regularly many times in recent months. If they want to have the same amount in Euros as you've promised to the customers , you need to show them that there are now 125,000 bitcoins owned by them in the blockchain, since 125,000 = 10m euros.

Where do these extra 25,000 bitcoins suddenly come from?

Please explain.

You clearly haven't been following this topic.

Are you looking for investing or should I just put you in the ignore list? Getting really tired of trolls on securities section, makes it really hard to follow the topics!

[fr33d0miz3r]

I have a technical question, sorry if I miss something.

You say that customers will see their money denominated in bitcoins in the blockchain.
Okay.
As I get it, when the price falls, you'll increase the BTC amount in the customers' accounts by sending new bitcoins to their wallets.

But what you'll do when the price rises? Remove bitcoins from the wallets? But you can't do it without customers' parts of private keys.

[cryptocyprus]

OK, so now you've confirmed that they will hold Bitcoins and you'll be showing them in the blockchain. As you say you're merely showing them what they're worth in euros. I get that now. Maybe this will get around regulation and lets assume for a minute that it does.

Here's the REAL problem.

You take 10m euros of deposits when it is 100:1, so buy 100,000 Bitcoins. You can then show them to the customers - everybody is happy etc.

Now the rate falls to 80:1, just the sort of movement that has happened regularly many times in recent months. If they want to have the same amount in Euros as you've promised to the customers , you need to show them that there are now 125,000 bitcoins owned by them in the blockchain, since 125,000 = 10m euros.

Where do these extra 25,000 bitcoins suddenly come from?

Please explain.

If you can buy €10m worth of Bitcoin without generating a cent of upwards movement, do you want a job?

According to the clarkmoody calculator an order of €10m ($13,524,478.77) would create slippage of BTC47,301 however the Bitcoin that we top our customers wallets up with, is taken from our own reserves that we openly trade with.

Deprived - the wording of the account contracts is being prepared as part of our regulatory proposals.

[cryptocyprus]

I have a technical question, sorry if I miss something.

You say that customers will see their money denominated in bitcoins in the blockchain.
Okay.
As I get it, when the price falls, you'll increase the BTC amount in the customers' accounts by sending new bitcoins to their wallets.

But what you'll do when the price rises? Remove bitcoins from the wallets? But you can't do it without customers' parts of private keys.

This part will be addressed within the contract between ourselves and the third legal entity, if the customer hasn't performed a transaction in x amount of hours following a rebalancing of the accounts.

[Deprived]

Deprived - the wording of the account contracts is being prepared as part of our regulatory proposals.

I wasn't asking for them now - or suggesting they should be ready yet.  I was just saying that I'll be interested to read them whenever they're done.  I wouldn't expect them to be completed until a lot nearer launch.

Sorry if my comment was read as though I believed they should have already been published - that wasn't my intent.

[cryptocyprus]

Deprived - the wording of the account contracts is being prepared as part of our regulatory proposals.

I wasn't asking for them now - or suggesting they should be ready yet.  I was just saying that I'll be interested to read them whenever they're done.  I wouldn't expect them to be completed until a lot nearer launch.

Sorry if my comment was read as though I believed they should have already been published - that wasn't my intent.

No I was just pointing it out, that we are already onto that part. All of our customer documentation will be in large print (even the boring parts) there will also be English & Russian translations of the documents which I will openly provide for everyone to see.

Much of the text will be determined by the acceptance of our proposals to the regulators and their direct input on that particular matter.

[ex-trader]

You clearly haven't been following this topic.

Are you looking for investing or should I just put you in the ignore list? Getting really tired of trolls on securities section, makes it really hard to follow the topics!

Please put me on your ignore list. You are clearly convinced everything is ok with the plan, so you have no need to pay attention to any of my questions or warnings.

[ex-trader]

however the Bitcoin that we top our customers wallets up with, is taken from our own reserves that we openly trade with.

So again I'll ask simple questions.

How much reserves do you have? What price movement does this cover?

You are doing nothing more than gambling with all customers money. You owe them all their money in a fixed amount of Euros via the 'pegging of exchange rates' and are holding all your assets in Bitcoins.

This make lots of money if BTC goes up, but will go bust if BTC falls.

This is not a sustainable or sensible business plan.

[cryptocyprus]

however the Bitcoin that we top our customers wallets up with, is taken from our own reserves that we openly trade with.

So again I'll ask simple questions.

How much reserves do you have? What price movement does this cover?

You are doing nothing more than gambling with all customers money. You owe them all their money in a fixed amount of Euros via the 'pegging of exchange rates' and are holding all your assets in Bitcoins.

This make lots of money if BTC goes up, but will go bust if BTC falls.

This is not a sustainable or sensible business plan.

Whilst Bitcoin has a use it will have value, we are adding to that usability on a large scale, we will hold our own reserves in Euro and Bitcoin. We do not use our customers money to trade with, we sell them Bitcoin to use and its associated benefits.

EDIT - We have provided a demonstration as to what we could hold as a minimum by the time we open for business and the rate decreases from the top of the April bubble through a crash based on holdings as documented in the prospectus.

[fr33d0miz3r]

however the Bitcoin that we top our customers wallets up with, is taken from our own reserves that we openly trade with.

This make lots of money if BTC goes up, but will go bust if BTC falls.

The price will significantly rise only because of their new customers btw.

cryptocyprus, will the customers need be residents of Cyprus, or travelers/tourists/business people who are not residents but came to Cyprus will also be able to open accounts in your bank?

[cryptocyprus]

however the Bitcoin that we top our customers wallets up with, is taken from our own reserves that we openly trade with.

This make lots of money if BTC goes up, but will go bust if BTC falls.

The price will significantly rise only because of their new customers btw.

Not at all, we will be adding demand and displaying that Bitcoin can succeed in the wider world, if anyone wants to jump ship who holds large volumes then the price will also decrease.