Business 28 March 2018Ed Drake
Charlie Lee, Litecoin Foundation apologize for LitePay collapse
The creator of Litecoin has issued an apology for the abrupt collapse of Litecoin-based payment startup LitePay.
The startup, which promised to offer an LTC-powered debit card, as well as payment processing services for merchants, was suddenly shut down this week, raising suspicions of a so-called ‘exit scam’.
The news came just a matter of days after LitePay CEO Kenneth Asare hosted a Reddit AMA, where he was accused of evading direct questions, and sharing only vague details about the work of the company.
A statement published by the Litecoin Foundation on their website this week set out their concerns over the LitePay project, and offered apologies to those affected by its closure.
“Prior to [the closure of LitePay this week], 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,” according to the group.
The Litecoin Foundation said it has “refused any further funding” because Asare “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,” the group said.
Litecoin founder Charlie Lee took to Twitter, where he expresses his apologies for his earlier optimism and support for the project: “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.”
However, the foundation stressed that Litecoin was not dependent on LitePay or any other single company, and promised to continue to make Litecoin more accessible to users worldwide.
“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,” the group said.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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