Quote from: Herp on March 27, 2014, 06:50:37 PM

It's amazing how far they've come in such a short time, how many friends they've managed to make in Cyprus and the Bitcoin awareness they've brought to this place.

That is one thing I know for sure Danny is proud of, as he should be. They are one of the few new firms actively spending money in Cyprus. I haven't been to the Turkish side of the island, but from Nicosia, to Larnaca, to Pafos - there are Neo&Bee billboards everywhere.

I'll admit, I still don't really understand their revenue model, and I personally believe they are missing an opportunity to trade more actively (they don't even have a ticker in their branch because they want to discourage speculation). That said, if their play is really to become the most established brick and mortar bitcoin operation, they are off to a good start. I think they believe that the price of bitcoin will come into some sort of equilibrium, at which point they will be able to act more like a normal money transmission company and collect fee income. Like I said, I think there are revenue opportunities that they are missing out on, but, you can't doubt the marketing and awareness effort they have made. The offices are slick and impressive, and there is a general feel of excitement there.

There are three reasons I am not buying their shares:

First and foremost, I don't think I can. I have a series 7, 3, and 63 licence. I work for a major US broker dealer, and I have to disclose outside investments. I think if I listed shares that I bought on a non-US compliant exchange in Panama I would get a lot of grief, if not actually in trouble.

As I said twice in this post, I don't really understand their revenue model. I've read the prospectus, and I've actually gone to their offices and met with Danny and George, but I still don't really understand a simple path to profitability. I am sure the stock will pop when they get regulatory approval from CySEC, but I don't understand their business model well enough.

Third, and finally, I don't have clarity to their pricing model. Rather then mark BTC values to an exchange, they mark them to an internal model. While I both like and trust Danny and George, I don't feel totally comfortable with the idea that they do this. Not so much because I think they are doing anything wrong, I don't; but rather because it makes me afraid they will face much a more difficult regulatory reality while pricing to a model. That being said, I do understand why they would do this... How do you price to an exchange level where your size is larger then the liquidity at the price? You are almost forced to develop your own model of what kind of liquidity you actually have. You have to build in slippage, commission if you are using private brokers for large transactions, market speed, and how your trades will push prices. I get it, and I get why they can't publish their model either as it could lead to predatory trading against them. It is however too much of a problem for me to wrap my head around because, frankly, I think that regulators are going to have a problem with mark to model.

Anyway, my opinion doesn't really matter here, as, what matters is buyers and sellers. Reason one pretty much precludes me from being involved anyway for now... but, two and three are things I wonder about.