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

[Herp]

Guess you haven't carefully read my post. I've said there's a good chance people will open such 100% pegged accounts exactly for that reason, that most act emotionally. I can see quite a few people being swayed by some persuasive marketing campaign to do just that, especially after the deposit confiscation scare they been through.

Regarding "being laughed out of court"; you really sure a populist court will be pro-banks these days? (especially with recent developments in Greece and Cyprus. For those who don't know Cyprus is basically Greece, ethnically, regionally and culturally). Banks are losing trials left and right in "abusive clauses" trials. So what if they've signed agreement, agreeing to whatever terms?! If court labels that agreement as having "abusive clauses" the agreement is worthless.

I'm not sure how to respond. What you're arguing simply isn't a point of contention. Assuming the customers are properly informed of the logistics of the pegged accounts (which I have no reason to think they wouldn't based on everything I've seen/read about Neo&Beee) then there isn't going to be any successful lawsuit. Feel free to disagree with that if you like. Nothing about the structure of the pegged accounts could be considered "abusive" to any reasonable person (which is the criteria most courts operate under).

The concept is simple: if you open a pegged account, you get to benefit from the bitcoin ecosystem without having to shoulder the risk of price fluctuation. Since you aren't shouldering any risk, you aren't seeing reward from price increases. What's that? You want to reap rewards if the bitcoin price increases? Perfect, there's a bitcoin-denominated account you can open.

Which is why I think having 25%, 50% pegged accounts and such would be helpful instead of 100% pegged.

Potential lawsuits I see coming out of 100% pegged accounts is clients suing, asking for some of that profit since they've provided all the money. A judge might go with the client on this one, as it's not hard for a decent lawyer for prove there may be some "abusive clause" in that agreement, even if customer signed it. If one such trial is won by a customer, it will open up whole can of worms, creating a precedent for others to follow.

What you may see as "protection from price fluctuation", a lawyer might he as abusive "high street robbery clause, sheeple unsuspecting customer being ripped off by smart savvy sophisticated Brit banker"

[N_S]

Correct. I don't think anyone will have such problems with pegged accounts, as long as they can access their deposits in Euro. My concern is people who think they are shouldering the risk of Bitcoin's exchange rate going downhill.

Yeah, I understand that. Although, I feel that fear would be pretty easy to put to rest.

[N_S]

Which is why I think having 25%, 50% pegged accounts and such would be helpful instead of 100% pegged.

Potential lawsuits I see coming out of 100% pegged accounts is clients suing, asking for some of that profit since they've provided all the money. A judge might go with the client on this one, as it's not hard for a decent lawyer for prove there may be some "abusive clause" in that agreement, even if customer signed it. If one such trial is won by a customer, it will open up whole can of worms, creating a precedent for others to follow.

What you may see as "protection from price fluctuation", a lawyer might he as abusive "high street robbery clause, sheeple unsuspecting customer being ripped off by smart savvy sophisticated Brit banker"

The varying percentages is an interesting idea.

As for the rest, this really is an easily navigated issue. The customers of pegged accounts wouldn't be "robbed" of anything. To think otherwise is patently unreasonable.

By your rationale, you'd run the same litigation risk with those holding 25%/50% pegged accounts - "They profited more than me! I'm suing!"

[Herp]

Which is why I think having 25%, 50% pegged accounts and such would be helpful instead of 100% pegged.

Potential lawsuits I see coming out of 100% pegged accounts is clients suing, asking for some of that profit since they've provided all the money. A judge might go with the client on this one, as it's not hard for a decent lawyer for prove there may be some "abusive clause" in that agreement, even if customer signed it. If one such trial is won by a customer, it will open up whole can of worms, creating a precedent for others to follow.

What you may see as "protection from price fluctuation", a lawyer might he as abusive "high street robbery clause, sheeple unsuspecting customer being ripped off by smart savvy sophisticated Brit banker"

The varying percentages is an interesting idea.

As for the rest, this really is an easily navigated issue. The customers of pegged accounts wouldn't be "robbed" of anything. To think otherwise is patently unreasonable.

By your rationale, you'd run the same litigation risk with those holding 25%/50% pegged accounts - "They profited more than me! I'm suing!"

You can make the case customer got something out of it. It's a big difference between something and nothing.

If I were to be really hellbent on making this high % peg idea work properly, I would seriously consider providing people with a 5% to 15% Bitcoin exposure for free even on a 100% peg. This way customer can get some extra from whole thing and still withdraw as much euros as he's deposited. I think taking on that extra risk would be totally worth it for dozens of reasons.

[N_S]

If I were to be really hellbent on making this high % peg idea work properly, I would seriously consider providing people with a 5% to 15% Bitcoin exposure for free even on a 100% peg. This way customer can get some extra from whole thing and still withdraw as much euros as he's deposited. I think taking on that extra risk would be totally worth it for dozens of reasons.

I think 15% is astronomically high considering you're holding all risk, but the idea in general isn't a bad one. I'd say 5% would be my absolute limit. Perhaps as an introductory kind of thing that lasts for the first 6 months or something.

[Herp]

If I were to be really hellbent on making this high % peg idea work properly, I would seriously consider providing people with a 5% to 15% Bitcoin exposure for free even on a 100% peg. This way customer can get some extra from whole thing and still withdraw as much euros as he's deposited. I think taking on that extra risk would be totally worth it for dozens of reasons.

I think 15% is astronomically high consi mdering you're holding all risk, but the idea in general isn't a bad one. I'd say 5% would be my absolute limit. Perhaps as an introductory kind of thing that lasts for the first 6 months or something.

It would be a dynamic interest rate that may attract lots of customers. Risk may be offset by higher business volume. Keep in mind banks also offer decent interest rates on euro deposits.

[Peter Lambert]

Having a percentage pegged account is silly. Just have two options, a EUR account or a BTC account. If the customer wants to have a mid-level exposure to the bitcoin price fluctuations, they can just have one account in BTC and one account in EUR, and put 50% of their money in each.

[klee]

Having a percentage pegged account is silly. Just have two options, a EUR account or a BTC account. If the customer wants to have a mid-level exposure to the bitcoin price fluctuations, they can just have one account in BTC and one account in EUR, and put 50% of their money in each.

Simple and direct!

[Herp]

Having a percentage pegged account is silly. Just have two options, a EUR account or a BTC account. If the customer wants to have a mid-level exposure to the bitcoin price fluctuations, they can just have one account in BTC and one account in EUR, and put 50% of their money in each.

You didn't get the point.

[Peter Lambert]

Having a percentage pegged account is silly. Just have two options, a EUR account or a BTC account. If the customer wants to have a mid-level exposure to the bitcoin price fluctuations, they can just have one account in BTC and one account in EUR, and put 50% of their money in each.

You didn't get the point.

Clearly. Can you explain more what the point is then?

[cryptocyprus]

We would open up ourselves to more litigation risk, by having too many options, the scenario of "it wasn't clear" is a much stronger case when you have multiple and varying options. With just two options it is clear cut.

A pegged wallet provides access to the Bitcoin protocol for use as a medium of exchange, with the benefits of Bitcoin being felt through the inability of a central authority putting their hands into your wallet to take everything out against your will. This also provides a stable platform to enable commerce to occur, the benefits to the merchants accepting Bitcoin payments are speed and cost savings.

A BTC wallet provides all the aspects of the Bitcoin protocol with all increases and decreases felt by the customer, we receive the exchange fee, which will be similar to one of the traditional exchanges.

Time Based Wallets, hoard the coins for an agreed period of time and in return for the protection against negative movements and you get a percentage of any growth.

We are also adding the additional services such as international remittance, we are currently working towards having in excess of 1 million locations worldwide at the time of launch, where we can transmit the Bitcoin across the globe to these agents and the end user can walk away with the Government Fiat in their local jurisdiction, the transmission will be completed with Bitcoin instead of the slow banking systems currently used. The benefits of using Bitcoin for this process can reduce the costs in comparison to the traditional operators in this space.

We are also going to be making progress in relation to branded insurance products through a third party carrier from the beginning of November onwards, we will be in a position to provide more clarity on the projected income from these products, shortly after this time. I will not provide any projected earnings because there are too many contributing factors to consider until we have chosen our strategic partner and I do not want to mislead anyone.

We are also investigating the opportunity to add a European based Bitinstant style service to our offerings and also our own Bitcoin based securities market, the latter is only preliminary investigations to ascertain any legal/regulatory requirements.

I am a main speaker at a conference in Cyprus on October 9th which is organized by the Cyprus International Institute of Management, my speech is on both Neo & Bee and Bitcoin in general.

I shall have the first merchants ready to announce by the end of next week.

I shall be announcing the Operations Director once I return to Cyprus from Amsterdam.

I need to finish writing out the post that will detail our path to regulation and detailing our partners that are aiding us in this process and providing ongoing services. I need to ensure this post is extremely clear and accurate, so no misunderstandings occur. I will complete this first thing in the morning (Dutch timezone), as I am in desperate need of sleep (Apologies for this slight delay).

[N_S]

Thanks for the update!

I am a main speaker at a conference in Cyprus on August 9th which is organized by the Cyprus International Institute of Management, my speech is on both Neo & Bee and Bitcoin in general.

Is the date a typo, or are you referring to 9 Aug. 2014?

[Vbs]

(...)
We are also adding the additional services such as international remittance, we are currently working towards having in excess of 1 million locations worldwide at the time of launch, where we can transmit the Bitcoin across the globe to these agents and the end user can walk away with the Government Fiat in their local jurisdiction, the transmission will be completed with Bitcoin instead of the slow banking systems currently used. The benefits of using Bitcoin for this process can reduce the costs in comparison to the traditional operators in this space.
(...)

This is excellent news! Huge market there!

[cocoxixi]

Hi Mr. Cryptocyprus,
I just want to say that this is an amazing idea you have here, and it will definitely be extremely successful. No doubt about it!

Anyway, this isn't like, a big deal or anything, but what would happen in this scenario:

- you have 100 million euros in deposits that were converted to bitcoin at an average price of 100€ (hence, 1 million bitcoins)
- bitcoin price falls to 50€

You now need an extra 1 million bitcoins (that will cost you 50 million euros) in order to re-balance the customers accounts... So... Are you pulling that million from your anus?

Also... What about third-party risk? And liquidity? Are we going with the "fingers-crossed" strategy here?

And finally... Do you really think any reasonable person would deposit a single euro in your gambling venture (ups, I meant "bank")? You might get money from gullible "investors", but actual customers depositing euros? LOL

Oh, and this "business" MO is clearly illegal, and there's no way you'll be allowed to do it in any EU country. But anyway, these are all minor issues, I predict great success for your "bank"! I'll be following this... For the laughs!

[kingcrimson]

Coco you are a troll. Banks speculate with customers money all the time. It is common practice (JP Morgan gambled with $350 billion dollars on mortgages, gold, etc). They may be insured, but make no mistake the governments will cover their asses through printing and inflation to make up for it.

 To me, this security depends on if you believe in bitcoin or not. I personally value the technology and rock solid fundamentals of bitcoin far more than government insured play money, therefore I think it is an excellent ground level utilization of bitcoin, experimented in real world markets. But it will be very interesting to see how it plays out.

[cryptocyprus]

Thanks for the update!

I am a main speaker at a conference in Cyprus on August 9th which is organized by the Cyprus International Institute of Management, my speech is on both Neo & Bee and Bitcoin in general.

Is the date a typo, or are you referring to 9 Aug. 2014?

Yes it was a typo and now fixed, thanks for pointing that out.

Our path to regulation

As many people within Bitcoin assume the stance that the regulators have an agenda against Bitcoin, I can assure you this is not the case. The regulators are always two steps behind technology, their procedures towards making changes without external input can be very slow. Once you start asking questions many of them too see the potential of Bitcoin and wish to obtain a better knowledge of the protocol itself. This produces a situation where Bitcoin businesses get levied with the existing regulations that are enforced upon more traditional financial institutions, they fully understand that they cannot regulate the protocol themselves, however they can regulate the point of entry where government issued fiat can be converted into Bitcoin.

We are working with our lawyers and KPMG to provide the regulators with a knowledge base (in Greek) of the Bitcoin protocol. Both our lawyers and KPMG have assigned partners to our case to ensure that it is handled correctly from the outset.

Due to the fact that our business has so many intricate parts, we are proposing our own "new" framework to the regulators in Cyprus, that is more fitting than the traditional models. This framework will include the more traditional AML/KYC policies, with strict auditing processes along with many more smaller details.

The fact that we are using such reputable lawyers and KPMG we know for certain that the regulators will take a positive view towards our proposals, they will make amendments where they believe things need to be changed, that is both understandable and expected.

We have factored Central Bank Deposits and minimum required seed capital into our plans from the beginning, so this is not of grave concern to myself.

This process will be complete before we open the flagship branch (Yes lawyers can work quickly too   ), please also remember that this is Cyprus and not the US.

In a nut shell
We are using our Lawyers & KPMG to provide a knowledge base of Bitcoin to the regulators, we are also proposing our own regulatory framework directly to the regulators that is more fitting to Bitcoin and our business operations than the regular archaic legal framework. This is being positively received by the regulators because we are being extremely proactive whilst using reputable partners to achieve our goals.

As a side note to anyone starting a venture that could potentially fall foul of the regulators, ask the questions to the regulators through a reputable lawyer and tax advisers, every business is different and treated as such, they are not necessarily evil people and they offer 10x as much help if you are proactive and provide them with detailed information as to what Bitcoin is, how it works and what it is your going to be doing.

 

[Herp]

We would open up ourselves to more litigation risk, by having too many options, the scenario of "it wasn't clear" is a much stronger case when you have multiple and varying options. With just two options it is clear cut.


Time Based Wallets, hoard the coins for an agreed period of time and in return for the protection against negative movements and you get a percentage of any growth.

These "Time Based Wallets" sound interesting. Can you give more info about them? Also isn't this like a 3rd option?

Will the 100% pegged accounts provide any interest rate? You will be competing with banks that offer decent interest rates even on simple accounts who don't commit to a time deposit. Say you customers give 10% exposure to Bitcoin even on 100% pegged accounts. You could easily take up the risk and still offer customers a decent interest rate.

[cryptocyprus]

We would open up ourselves to more litigation risk, by having too many options, the scenario of "it wasn't clear" is a much stronger case when you have multiple and varying options. With just two options it is clear cut.


Time Based Wallets, hoard the coins for an agreed period of time and in return for the protection against negative movements and you get a percentage of any growth.

These "Time Based Wallets" sound interesting. Can you give more info about them? Also isn't this like a 3rd option?

Time based wallets are not one of the two instant access wallets.

There is more details in the prospectus surrounding these wallets, to summarize;

The buy €10,000 worth of Bitcoin and want to keep it locked away for anywhere between 6 - 60 months.
The will receive a percentage of any POTENTIAL growth, whilst we will protect them negative price movements.

Benefits to the customer:

No one can take their money without their permission.
They have the POTENTIAL to out perform the traditional banks offerings.
They know we are not trading with their coins.
All gains are tax free in Cyprus.

Benefits to Neo

We know those coins are not going to be dumped onto the market any time soon.
We know when those coins will become trade able again (if the customer decides they want to cash out at the end of the term).
We receive the remaining percentage of growth in exchange for taking the risk on negative price movements.

[lavalampoon]

We would open up ourselves to more litigation risk, by having too many options, the scenario of "it wasn't clear" is a much stronger case when you have multiple and varying options. With just two options it is clear cut.

If having options is a litigation risk then just have ONE option. Nobody will want to open two accounts just to have the ability to adjust their risk. People don't open a brokerage account for each security they own. Customers would find it inconvenient to pay bills from a balance that is split. If someone considers it simpler then consider you are solving what is likely to be a common issue by asking your customer to have two checkbooks, two ATM cards, two statements, two ledgers, etc.

Build your technology from the start so that an account has an allocation percentage. Make it as easy to adjust that percentage as is practical for you to implement. Consider that what your are providing is commodity-guaranteed banking and that every customer will have a different idea about which commodities are safer at the moment. You are providing a traditional bank as an alternative to risks from fractional reserve banking. Bitcoin shouldn't even need to be relevant; it is just one of the commodity choices.

The default should be an Euro-guaranteed account. You guarantee balances according to the commodity choices. You back that guarantee with bank choices. It is like how my bank holds gold reserves or bonds to back customer deposits. Customers need not see any more options than they'd be comfortable with, but the point of using your bank is that they have a choice to have their money fixed to something other than fiat.

[cocoxixi]

Coco you are a troll. Banks speculate with customers money all the time. It is common practice (JP Morgan gambled with $350 billion dollars on mortgages, gold, etc). They may be insured, but make no mistake the governments will cover their asses through printing and inflation to make up for it.

 To me, this security depends on if you believe in bitcoin or not. I personally value the technology and rock solid fundamentals of bitcoin far more than government insured play money, therefore I think it is an excellent ground level utilization of bitcoin, experimented in real world markets. But it will be very interesting to see how it plays out.

Oh please, I think you got me all wrong. I don't want to discourage anyone from investing in this "business", cause I love me some investor tears! The more the merrier!

It's so great that you believe in bitcoin. I'm so happy for you! I'm sure the Cypriots will be happy to support your dream, by depositing euros and taking all the risk, with nothing to gain. And I'm sure the authorities will also think that's great, cause bitcoin is the best thing ever!!!

I would also like to announce that I'm now accepting investments for my own bank... I'll be securing the deposits in beanie babies. Can I have my millions please? Wanna partner up, mister criptocyprus?