Litecoin Drops 11% After LitePay Announces Sudden Exit
Litecoin founder Charlie Lee issued an apology following news that payment processor LitePay is going out of business. Lee had previously promoted the startup and said today, “I am sorry for having hyped up this company and vow to do better due diligence in the future.”
Like everyone else, we got too excited about something that was too good to be true and we optimistically overlooked many of the warning signs. I am sorry for having hyped up this company and vow to do better due diligence in the future. https://t.co/khIjeHnyZ1
— Charlie Lee [LTC⚡] (@SatoshiLite) March 26, 2018
Since the news broke, Litecoin’s price has fallen by about 11 percent, clocking in at $141 early Tuesday morning, according to CoinMarketCap.
LitePay had previously promised that its merchant payment processing system would be live in February 2018, but has been silent since those plans were publicly delayed by the company.
On Monday the Litecoin Foundation announced that LitePay CEO Kenneth Asare “ceased all operations and is preparing to sell the company.” The abrupt announcement has sparked allegations of an exit scam. LitePay had promised to deliver merchant services as well as an LTC-funder debit card.
Here’s the full statement from the Litecoin Foundation:
To the Entire LTC Community,
We wanted to inform you that a couple of days ago, the Litecoin Foundation was contacted by Kenneth Asare, CEO of LitePay, informing us that he has ceased all operations and is preparing to sell the company.
Prior to that, the foundation had approached Kenneth regarding his less than transparent nature with the company and to express our, and the community’s, concerns regarding his recent Reddit AMA. It was at this time that Kenneth asked the foundation for more funds to continue operations. The foundation refused any further funding as he was unable to provide a satisfactory picture of where the money had been spent and refused to go into exact details about the company and show objective evidence to back up his statements.
We are greatly disheartened that this saga has ended in this way and we apologize for not doing enough due diligence that could have uncovered some of these issues earlier. We are currently working hard to tighten our due diligence practices and ensure that this does not happen again.
Litecoin was doing perfectly fine before the promise of LitePay and will continue to do so. The ecosystem is far bigger than one company and is continually growing with support from many others with market-ready products joining the space and fulfilling their promises to make it easier for the world to use Litecoin.
In the end, this is a valuable lesson for us to have learned. Litecoin and our community is as strong as it has ever been and we look forward to many great things to come. Thank you for your continuous support!
– The Litecoin Foundation