Why has the founder and CEO of the fifth largest cryptocurrency by market cap sold all of his holdings?
Satoshi Nakamoto, your move. https://t.co/efKxK3coV4
— Charlie Lee [LTC] (@SatoshiLite) December 20, 2017
Litecoin went live in 2011, reached $1 billion in market capitalisation in 2013, and has over $18 billion as of now. It was a Litecoin transaction that was the first to be executed with the Lightning Network, and the two big Chicago exchanges are considering adding the coin as a new cryptocurrency future contract just a week after debuting the product with Bitcoin. The future seems rosy for Litecoin, but founder Charlie Lee published an announcement this morning in which he said: “I no longer own a single LTC.”
The reason for this is simple – he sold/donated everything in order to avoid a conflict of interest, as he explained in his announcement on Reddit.
He wrote: “…whenever I tweet about Litecoin price or even just good or bads news, I get accused of doing it for personal benefit. Some people even think I short LTC! So in a sense, it is conflict of interest for me to hold LTC and tweet about it because I have so much influence.”
Lee has over 380,000 followers on Twitter, and social media has a significant influence on cryptocurrency prices. ‘Shilling’ is a real concern in this industry, as the value of digital assets is dependent on the opinion of the masses to a much greater extent than any other commodity.
And the masses are fickle. Pump and dump schemes are rife in the cryptocurrency world, so it is not surprising that Lee reports that he is often criticised for attempting to influence the price of Litecoin through his social media posts. “I have always refrained from buying/selling LTC before or after my major tweets, but this is something only I know,” he writes.
One might expect his announcement to cause a drop in price, much as a commander deciding to leave the field mid-battle might cause his troops to lose confidence. However, the price of Litecoin actually went up after he sold his holdings, and does not seem to have been materially affected.
Lee assures the public that he will still be working full-time on Litecoin, and that his personal wealth is such that he no longer needs to rely on the monetary success of the coin itself.
Still, the public are hard to please. We reported today on the suspiciously punctual spike in the price of Bitcoin Cash just as it debuted on the US’ biggest cryptocurrency exchange. Coincidentally(?), Lee’s announcement came out just before that. He updated his announcement: “I wrote the above before the recent Bcash on GDAX/Coinbase fiasco. As you can see, some people even think I’m pumping Bcash for my personal benefit. It seems like I just can’t win.”