Litecoin creator Charlie Lee and the Litecoin Foundation issued apologies on Monday, following the abrupt shutdown of LitePay, one of the most hyped projects of the Litecoin scene.
The Litecoin Foundation announcement on its official blog that Kenneth Asare, CEO of LitePay, has informed the foundation “that he has ceased all operations and is preparing to sell the company.”
Lee issued a separate apology via Twitter, in which he apologized to the community for having added to the hype and vowed 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
The Litecoin Foundation cited the opaque nature of business maintained by Assare as a reason for the shutdown. While the Litecoin Foundation provided initial funding for the development of a LTC-based payment system, Assare eventually asked for more funds, but was unable to show sufficient transparency regarding the finances and development of the project.
“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,” read a section of the Litecoin Foundation’s announcement.
“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,” the announcement added.
No sorry needed. LitePay has been a disappointment to all of us so far. Maybe they will surprise us. But LitePay is just one of many companies supporting Litecoin. And you are right, so far LitePal has been doing a tremendous job. Onwards and upwards!
— Charlie Lee [LTC] (@SatoshiLite) March 21, 2018
The announcement came as no surprise to parts of the Litecoin community, with some Reddit users stressing that they had accepted long ago that LitePay was not going to happen. Focusing on the wording of the announcement by the Litecoin Foundation, one user however, raised the question as to “who is buying LitePay?”
Impact on the market
The stressed announcement came at a time which already sees the cryptocurrency market struggling with its falling value. The impact of LitePay on Litecoin’s value is clearly visible as the coin plummeted 11 percent in the last 24 hours to the current trading value of $141. However, it is to be noted that other major projects like Ethereum and EOS are also shedding their values on par with Litecoin.
“Litecoin was doing perfectly fine before the promise of LitePay and will continue to do so,” the announcement continued. “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.”