British boss of Bitcoin virtual currency firm is wanted in Cyprus on suspicion of fraud

Danny Brewster, 27, is accused of failing to deliver £70,000 worth of bitcoins

Spent an estimated £500,000 euros on advertising for launch of Neo & Bee

Employees alleged to have not been paid in March

Brewster broke his long silence on April 2 when he denied any wrongdoing



Danny Brewster, 27, is accused of failing to deliver £70,000 worth of bitcoins

The British boss of a company selling the virtual currency Bitcoins is now wanted by Cyprus police on suspicion of fraud.



Danny Brewster, 27, is accused of failing to deliver £70,000 worth of bitcoins, a currency created on a computer but increasingly used in real world transactions.



The Bentley-owning Briton also allegedly racked up debts of about a million euros on the recession-hit island, a local financial newspaper reported.



These stem from ‘a major marketing campaign, employing nearly 20 staff and developers, renting office space and buying furniture,’ the Financial Mirror said on its website on Saturday.



Brewster is claimed to have lavished an estimated half-a-million euros alone on a huge advertising blitz for the recent launch of his company, Neo & Bee.



His baffled and angry employees, most if not all of them now out of work, were not paid in March.



A police official said today investigations are on-going and did not rule out issuing a European arrest warrant for the Briton, who is understood to come from the Sheffield area.



‘He was spending money like crazy,’ one of his worried creditors told The Daily Mail.



Brewster, who said he had a banking background, struck him as very ‘gentlemanly, cordial and very willing to listen and learn’.

But, less than a month after the grand opening of his Bitcoin store in a swanky Nicosia office block on February 24, Brewster is alleged to have abruptly disappeared abroad. His whereabouts remain a mystery.

His last communication with his staff was on March 19 when he told an employee he had gone abroad to raise capital, sources said.



Brewster publicly broke his long silence for the first and last time on April 2 when he vehemently denied any wrongdoing.

He said he originally left Cyprus on a ‘short-term temporary basis’ to raise additional capital ‘for the business through the sale of my equity as we had run out of liquidity’.



But, he added in a posting on an online bitcoin talk forum, he then received ‘threats’ targeting his young daughter, which he had reported to the ‘relevant authorities’.



At this point the Neo & Beo CEO said he decided to sell of his equity in the company and remain abroad, it is claimed.

A woman walks past the offices of Neo & Bee in Nicosia, Cyprus. Cyprus based bitcoin vendor Neo & Bee is under investigation by police after allegations it committed fraud against at least two of their customers

Denying claims of embezzlement, he insisted that ‘every single bitcoin raised and spent is accounted for’.



Police, however, said Brewster never informed them of the alleged threats against his young daughter.



He no longer lives with her mother but it is unclear whether he is divorced or never married.



The Financial Mirror said it ‘is not known whether Brewster has access to the nearly three mln euros worth of bitcoins that LMB [Holdings] maintains’, referring to Neo & Bee’s UK-based parent company.



It added Brewster threw a ‘smokescreen a few weeks ago by agreeing to pay some 35,000 euros in duties to import his Bentley’.



Another source told the Mail he also paid an entire year’s rent in February on a big house in an upmarket Nicosia suburb.



Neo & Bee halted operations in late March before its software to carry out transactions had even gone live.



But trading of its shares on the private Havelock Investments exchange has continued after a brief suspension earlier this month.



Their value has plunged along with the company’s market capitalisation.



Both the Cyprus Central Bank and the finance ministry issued warnings to customers after Neo & Bee’s lavish advertising campaign last month, saying the bitcoin was an unregulated virtual currency and therefore inherently unsafe.



But, according to Brewster’s sales pitch, it was traditional banks that people could no longer trust following the precedent of Cyprus’s painful ‘bail-in’ last year.



‘He kept telling us his idea was to build something that would either be taken over by some international big investor and make this into a regional or worldwide brand,’ the creditor said.

