Monday was certainly not a good day for Litecoin supporters and enthusiasts as an LTC-based payment processing startup LitePay abruptly announced to halt its operations. The Litecoin Foundation made this announcement through a public post on its website.
The Litecoin Foundation that looks after the development of the cryptocurrency said in the post that it tried to contact LitePay founder and CEO, Kenneth Assare, on March 16, on growing concerns about the not so transparent operations of the startup. After the inquiry by the Litecoin Foundation, Assare said that he has decided to halt the operations of LitePay and sell the company.
In its public post, the Litecoin Foundation explains that “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.”
Having been aware of this new development, Litecoin founder Charlie Lee expressed deep regrets for supporting this startup for this project. Lee tweeted:
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
Last year in December 2017, LitePay said that it would start offering wallet services and LitePay debit cards using which users would be able to convert Litecoin to U.S Dollars. These services were to launch in February last month. This business venture also received some appreciation from the Litecoin Foundation in December where it tweeted:
— Litecoin Foundation (@LTCFoundation) December 21, 2017
Last month in the mid fo February, Litecoin price shot up amidst reports that LitePay will be launching its merchant payment processing system for Litecoin that would go live by Feb 26. However, later in an e-mail 5th of March, LitePay said that the startup is checking for all perspective merchants and that it will hold off card registrations “due to the negative perception and drastic actions card issuers have towards cryptocurrency companies.” Since then, we have yet to hear any word from the company.
In its public post, the Litecoin Foundation also apologized for having supported the startup saying: “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.”
However, the Foundation has still expressed positive hopes on the working of Litecoin saying: “Litecoin was doing perfectly fine before the promise of LitePay and will continue to do so.” It finally concluded saying: “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.”
As soon as the news on LitePay broke out, Litecoin price corrected by more than 10% on Monday. Currently, at the press time, the cryptocurrency is trading at $141.67, according to the data on CoinMarketCap.