Litecoin Drops 10% After ‘Too Good to Be True’ LitePay Shuts Down

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Litecoin Drops 10% After ‘Too Good to Be True’ LitePay Shuts Down

LitePay, one of the most touted ventures in the Litecoin community, unexpectedly ceased operations on Monday, sparking apologies from the Litecoin Foundation and Litecoin founder Charlie Lee.

Kenneth Asare, the CEO of payments processor LitePay, notified the Litecoin Foundation that “he has suspended all operations and is planning to sell the firm.”

(See also:UK Launches Cryptocurrency Task Force.)

Litecoin Creator Apologizes for ‘Getting too Excited’

“Like everyone else, we were too enthused about something that seemed too wonderful to be true and naively ignored many of the warning flags,” said the CEO of the Litecoin Foundation in a tweet. “I apologize for overhyping this organization and promise to perform greater due diligence in the future,” he wrote. Lee said in December that he “traded and gave” virtually all of his litecoin holdings.

We, like everyone else, were too enthusiastic about something that seemed too wonderful to be true, and we confidently ignored many of the warning flags. I apologize for overhyping this firm and promise to do more due research in the future.

— Charlie Lee [LTC] (@SatoshiLite) March 26, 2018

So much for the LitePaydebit card

LitePay said that it will provide a crypto wallet as well as a “LitePay debit card” via which customers could convert litecoin to US dollars. Litecoin surged in February, fueled by the revelation that LitePay, a proposed litecoin merchant payment processing system, will go online on February 26. LitePay announced in an email to clients earlier this month that it was “screening all prospective merchants” and deferring card registrations “due to the unfavorable impression and harsh measures card issuers have against cryptocurrency startups.”

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According to Coinbase, LTC is trading at $140.20 at 12:20 UTC, down 7.2% in the last 24 hours. The cryptocurrency reached a record high of $339.45 in mid-December 2017, during the height of the crypto frenzy, and represents a more than 3,000% increase over the previous 12 months.

“Litecoin was performing OK before the promise of LitePay and will continue to do so,” the Litecoin Foundation said on its website.

The announcement about the world’s fifth biggest cryptocurrency by market capitalization comes as bitcoin, the world’s largest digital coin, fell below $8,000 this week due to a slew of bad stories, including a ban on crypto adverts on the Twitter Inc. (TWTR) platform. Jack Dorsey, CEO of Twitter and Square Inc. (SQ), which has been identified as a fintech company ready to blossom on crypto payments, joins internet behemoths Facebook Inc. (FB) and Alphabet Inc. (GOOG) in opposing the ban, which tries to combat a rise in digital currency fraud.

(Also see Bitcoin: Prices Fall Due to Japan Crypto Crackdown.)

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and this article is not a suggestion by Investopedia or the author to do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. The author owns cryptocurrencies as of the day this post was published.

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