Neo & Bee: A consultant’s perspective


I am writing this report to provide a consultant’s perspective on the events that unfolded at Neo & Bee, a Cyprus-based company I consulted for, after the abrupt departure of the CEO Danny Brewster and the collapse of the company. I was as surprised and bewildered by these events as much as the rest of the community, dismayed that another bitcoin company had imploded amidst allegations of fraud and leaving many investors, creditors and employees with serious losses. When I consulted for Neo & Bee, I had the privilege of working with many talented, committed, honest and dedicated people, all of whom were betrayed by Danny; these people have found themselves without a job and with damaged reputations through no fault of their own. My goal in writing this is to offer honesty and transparency, which has always been my primary principle in business dealings, and to provide the community with some answers, however limited those may be because of my limited involvement. I am frequently asked to assist startups in the bitcoin space and I do so on a weekly basis, behind the scenes and most often without compensation, because I believe in bitcoin and I want to see the whole space thrive. In this case, I had a paid relationship with Neo & Bee and in some ways my reputation was exploited to further the goals of a CEO who was not acting honestly. I will do my best to prevent that from happening again, while continuing to work in this industry in support of the many amazing startups and dedicated professionals.




I first met George Papageorgiou, who eventually became the Neo & Bee COO, when he was still working on his MBA thesis on bitcoin, in April of 2013. Over the next 6-7 months, we kept in touch and I was very impressed by George’s professionalism, insights and analytical thinking. At some time in the fall of 2013, I learned that George had joined a new company Neo & Bee, run by Danny Brewster. I didn’t know much about the company (just had heard of the name N&B and vaguely of the name Danny Brewster), but I did know George and that intrigued me.


In November of 2013, George called me and asked if I would be willing to work with Neo & Bee, as an advisor, as a member of the board or as an executive in the company.I explained that I already had a number of other projects and could not commit very much of my time to N&B and as a result I could not have any fiduciary or management responsibility. However, I thought the N&B project sounded interesting, wanted to learn more, and suggested that I could work as a technical advisor for their Advisory Board, on a retainer basis. This would allow me to offer advice to the developers, as well as advice on security strategy to the executives and the board, but on a limited time basis.


A day or so later, I joined a call with George Papageorgiou (the COO) and Danny Brewster (the CEO) to discuss the details. This was the first time I had spoken with Danny (as far as I can remember) and he outlined his vision for Neo & Bee, specifically to create a bitcoin exchange and bitcoin services company to serve Cyprus and international consumers and institutional investors. He told me he wanted to make Cyprus a bitcoin leader, and had support from a variety of Cypriot government agencies, hinting at rapid progress in achieving regulatory “legitimacy” that would allow N&B to operate in Cyprus with the blessing and support of the local banking regulators.

During that call I explained that I could only be involved as a technical advisor and that due to my limited time I could not endorse N&B with investors or take on a director position that would involve fiduciary or oversight responsibilities. I also asked that my role would be communicated only as an advisor, not as a director and not as an endorsement towards investors. Danny agreed to these terms and a few days later we agreed to start on a trial basis for three months, during which time I would get to know the team, they would get to know me and we would see whether the relationship was productive. We agreed on a “retainer” fee, meaning that I would be paid monthly, in advance, for up to 5 hours of technical consulting, whether N&B used the time or not.


At this time in November, I was not that well known in the bitcoin space, though I had a small but growing reputation. Honestly I was glad to have some paid work after two years of working in bitcoin without any income. That’s when I made the first mistake in this relationship: I agreed to proceed on a verbal agreement, given this minor role, without a formal contract.


In the first month of the relationship I had four or five calls with the developers to discuss their security architecture and strategy. I reviewed some code to understand what they were doing and I designed a security architecture that created modularity and “separation of concerns” between the front-end and the back-end processing systems to protect against compromise. My work was focused on security advice for the software developers, protecting against external threats. I also recommended an architecture for the bitcoin-facing nodes and discussed various options for that implementation (bitcoind vs bitcoinj vs. libbitcoin etc.). These were all technical discussions that did not involve the CEO, though some did involve George Papageorgiou. This work was in alignment with my expectations of the role.


In January I participated in two team calls, where they discussed their plans for the launch of the new branch office and where Danny told the team about making a big splash with the Cyprus media and gearing up for a big launch. My impression from these calls was of a company with strong morale, excitement and commitment by the employees and an ambitious plan for bitcoin in Cyprus. As an outside technical advisor, I saw no indications of internal problems, financial or otherwise.


After mid-January and until early February, the contact from Neo & Bee developers was quite sparse. I think I only had one or two email exchanges and skype exchanges to advise on some technical choices. Prior to my invoice in mid-February, I brought this to the attention of Danny, by saying that I wanted to re-visit my involvement – if they didn’t need as much help, then there wasn’t much point in having me as an advisor. After my outreach I got another burst of activity from the team.


In late February and again on the 10th of March, I reached out by Skype to Danny, asking him to make sure the team engaged with me more closely, so I could add value. I reminded him that unless they reached out, I would not know if they needed technical help and I urged him to use the technical advice hours he was paying for. In his last communication on Skype, Danny told me he would convene a team meeting and get some dates from everyone on March 11th for such a meeting. I did not hear back the next day.


On March 13th, I received a call from George and Danny about some problems with the Cypriot advertising regulators. It seemed the regulators were acting on a consumer complaint and were challenging Neo & Bee’s ads saying that bitcoin had “absolute security” or some words to that effect. The regulators had done some Wikipedia research, seen the April 2013 blockchain fork and decided that the statement of absolute security was contradicted by those events. The Cypriot regulators wanted an expert provided by Neo & Bee to produce a statement explaining the April 2013 issues and to support N&B’s claim of “absolute security”. I suggested that I was not an independent expert, since I consulted for them, but that they should reach out to the Bitcoin Foundation and see if they might be able to help. Danny sent an email to the Bitcoin Foundation asking for expert assistance on March 14th, cc’ing me. That is the last communication I saw
from Danny.


Danny Ran Away


A few days later, on March 22nd, I sent a Skype message to Danny asking “How are things going with the Cypriot advertising regulators?”. I never heard back. I started hearing rumors of problems at N&B on March 27th. I reached out to Danny again and received no response. At this time I was travelling to a conference and trying to catch up with a week of emails. After returning from the conferenceon March 30th, I was contacted via Skype by George Papageorgiou and Øystein Aaby, the Compliance and Risk Management Officer [I am not entirely sure Øystein was the second person on that call, I had not seen Øystein in person and did not recognise him], who explained that N&B CEO was AWOL and that the team was trying to figure out what to do to keep the company going but could not communicate publicly as they didn’t know what was going on and had no authority. I advised the team to go public as soon as possible.


Rumors were building and the first articles were appearing in the bitcoin press. Before my call on March 30th, a slew of articles had appeared on reddit and twitter indicating something was wrong at Neo & Bee, but without too many details.Not knowing anything, I couldn’t make any public statements either, for fear of inflaming the situation or spreading unsubstantiated rumors. Instead, during that call on March 30th, I suggested the team at N&B should go public as soon as possible. They told me they had sent an “ultimatum” to Danny and would go public within 48 hrs if he didn’t respond. Trading at Havelock had already ceased for a few days and the press was already trying to figure out what was going on, though no one inside the company or outside seemed to have any answers. Danny was gone and he wouldn’t respond to anyone.


My Limited Role


For my work with Neo & Bee I was paid three times. My last invoice was issued on March 15th. Unlike previous invoices that had been paid within a day or two and well in advance of their due date, this invoice was still unpaid a week and a half later. In retrospect this was unusual and should have alerted me that something was wrong. However, since the invoice was not past due and given the activity surrounding the launch of the storefront in Cyprus, I simply assumed they were busy and would pay it by the due date of March 30th.


During the three and a half months I provided technical advice at Neo & Bee, I was not involved in any other aspect of the company’s operations: I had no insight into finances, no oversight, no involvement in marketing or investor meetings, no contact with customers, investors or regulators. I was excited by their ambitious plans but I did not endorse them or do any publicity work for Neo & Bee. I may have occasionally mentioned Neo & Bee in my public tweets and presentations, as I do with many other companies in the space, whether I have a working relationship with them or not, but if I did so it was quite rare and not worded as an endorsement. I did no interviews or quotes for journalists on behalf of or in relation to Neo & Bee. When Neo & Bee launched their storefront in Cyprus, I read about it in the news and I retweeted the announcement, happy to see them making progress.


Neo & Bee Employees


It is important to note that this was the failure of one person and that the employees of Neo & Bee are victims in this company failure. Unlike investors who took risks, knowing they were risking their investment for a reward, employees do not take a position in a company as a risk venture, they do it to pay their bills and support their families. Those employees have been hurt by this, finding themselves suddenly unemployed, with unpaid paychecks and missed bills. Everyone I worked with at Neo & Bee was professional, committed, talented and passionate about bitcoin and I have no reason to believe the mismanagement went any further than Danny. While the executives of the firm may suffer damage to their reputations, I think it is important to recognize that it is easy to see the signs in hindsight but much harder to see them or act upon them in real life when lacking certainty and operating under a busy work schedule. It’s easy to snipe from the sidelines, it’s much harder to run a company in a fast-paced industry like bitcoin, under intense competitive pressure. I hope we can all show restraint and compassion, even if there is legitimate need for answers and explanations.

Mistakes I Made and Lessons I Learned


Since I started working with Neo & Bee, my reputation in the industry has grown and I have received many dozens of requests for ongoing consulting, endorsements and publicity related activities. I have declined them all, except for my role as CSO at Blockchain and my unpaid role as a mentor for startups at the Silicon Valley Plug and Play Tech Center. I am in discussions with a number of companies about offering them advice, in a consulting retainer form, similar to what I offered for Neo & Bee, though I do not currently have any such relationships.


As my reputation has grown, I have tried to practice full transparency and have made efforts to control the use of my name and remove any appearance of endorsement, so as not to lend my reputation to anyone who might exploit it for fraud or other self-serving purposes. I have developed a detailed Retainer Agreement that clearly defines the scope of my role, which is very limited for technical advising, and prohibits the use of my name outside of the scope of my role. These limitations are intended to protect the public. My contract further explicitly states that I have no fiduciary or oversight responsibilities while acting as a technical advisor, to ensure that the company understands the scope of my role.  


I now advise all of the executives and board members in any company where I am offering advice, paid or unpaid, to carefully construct controls over treasury funds to ensure separation-of-duties and to prevent embezzlement or fraud by any executive. I put it rather bluntly: “Look at the person sitting next to you, your partner in this business and imagine them running off to an island with the millions you might raise. Do not trust anyone, use internal security controls, like any large corporation should.” These types of incidents are far too common, in the fiat world as much as in bitcoin. I will continue to advocate for security controls rather than trust in individuals. I wish I had done so at Neo & Bee.


While I believe I acted in good faith and while my role was minor and included no fiduciary or oversight duties, I did not do enough to prevent my reputation from being exploited. I do not believe Neo & Bee  misrepresented my role, at least I did not see any misrepresentations in public, but it is possible that some people read more into my involvement than either N&B’s statements suggested or the facts justified. Consumers and investors in the bitcoin space should use the same scrutiny as they do in other start-up spaces. At minimum, they should do due diligence before investing their money or handing it over to any company for safekeeping. Consumers and investors should not rely on any endorsement or, even less so, rely on any contractual arrangement with a known person in the industry as a substitute for research and due diligence. No individual can vouch for an entire company. Instead cryptographic proof, public ledger transparency and cryptographic controls are better than any audit or individual oversight. Consumers and investors should insist on these controls and companies should embrace them as best practices.


I hope other companies can avoid the mistakes made by Neo & Bee and avoid being susceptible to the whims or failings of any one individual. The bitcoin blockchain offers a better way to manage companies so that we don’t repeat the fai
lures we see so often in the broader economy. I hope to be wiser and more skeptical in my business dealings and to offer better advice in the future, as a result of Neo & Bee’s failure. I also hope this statement, while personally humbling, serves as a lesson for others and offers some answers that the community deserves.


Andreas M. Antonopoulos