Despite the disappointment of LitePay’s demise, TenX have announced Litecoin (LTC) support in on its wallet platform while South Korea’s second biggest exchange Korbit launched Litecoin trading on 18 April.
It comes as a timely boon for the cryptocurrency and the Litecoin Foundation, which had been eagerly anticipating and supporting the development of LitePay – before it ceased operations without its product being launched in March.
TenX launched LTC on its wallet platforms without an official announcement last week, to ease the pressure on its systems while it finalized live testing.
Furthermore, TenX have stepped up and hope to provide a card service for Litecoin, one of the features LitePay had promised during it’s failed development:
“We are also excited to announce a new partnership; we have reached out to, and are working with the Litecoin Foundation to introduce a co-branded card for which more information will be available soon. We hope to become the preferred payment platform for fans and owners of Litecoin.”
Korbit’s support of Litecoin coincides with a slight uptrend in value since a recent low at the start of April. As per Coinmarketcap data, Litecoin is trading at $140.36.
Litecoin founder Charlie Lee celebrated the move on Twitter, highlighting the fact that he’d try to get Korbit to support the cryptocurrency years ago:
Tomorrow, @KorbitBTC will launch LTC trading. It’s awesome that one of the oldest Korean exchanges will now support Litecoin. I still remember asking Korbit many years ago. ?
I have donated 100 LTC for a promotion. See blog post for more details. ?https://t.co/f2H4HoJm9p
— Charlie Lee [LTC] (@SatoshiLite) April 17, 2018
LitePay promised to give users the ability to accept payments in Litecoin which facilitated an instantaneous conversion to fiat currency which could then be deposited to a conventional bank account in over 38 countries.
Furthermore LitePay was touting a 1 percent transaction fee, which it claimed would beat conventional credit card rates.
Unfortunately, none of this ever materialized, as Litecoin Foundation director of operations Keith Yong confirmed the news on March 26 that he had stopped development and would be selling the company.
Yong expressed his dissatisfaction with the state of affairs in an official announcement on the website.
How things came undone
The launch of the project was met with cautious optimism late in 2017 with an ambitious launch date set for Feb. 26 which has since come and gone.
For the public, things came undone when Litepay CEO Kenneth Asare opened himself to an Ask Me Anything (AMA) session on Reddit on March 17. What he’d probably planned to be a candid public engagement for the project spelled the beginning of the end.
Seasoned cryptocurrency community members, made up of well-informed developers and the likes, tore into Asare as he struggled to answer a slew of questions about the project.
One user, cdm9002 labelled Asare’s website a scam and challenged the LitePay CEO to ‘convince’ him that his project was real.
Why won’t LitePay happen?
For the Litecoin Foundation, alarm bells started ringing when the LitePay CEO asked for further funding for the project. Failing to disclose how initial funding had been spent, the NPO refused to assist with further investment according to Yong:
“Prior to that, 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. 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.”
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
Cointelegraph reached out to Lee for comment, but the Litecoin founder declined to give any further thoughts on the matter.
There has been no official announcement outlining why Asare decided to pack up shop – but these factors seemed to have played a role:
- Insufficient funding for further development;
- Outcry at lack of developer integration and unavailability of developer documentation;
- Strong community outcry at lack of transparency of business operations;
- Inability to support the total number of merchants that applied for registration (6500, according to Asare)
- Strict rules for merchant applying for payment processing program – requiring applicants to be legal business entities in order to be considered.
$50,000 invested in LitePay
While it’s not clear how much money Asare raised for the development of LitePay in total, Litecoin Foundation director Xinxi Wang is understood to have invested $50.000 into the project:
Literally, LitePay is just a small deal to us. The guy took me only $50K. And there will be many other payment solutions coming out.
But it’s going to be a huge deal to the their founder because it just ruined the reputation of his whole life.
— Xinxi Wang [LTC] (@TheRealXinxi) March 27, 2018
As Wang suggests, the monetary losses are far outweighed by the damage to Asare’s career in the wake of LitePay’s failure.
Given that the developer squandered the capital investment from Wang and the Litecoin Foundation, they weren’t about to keep handing out further investments.
While Charlie Lee said that a lack of due diligence was negligent on their part, Wang explained on Twitter that he felt Asare’s entrepreneurial track record gave the project credibility:
Regarding LitePay, I did many times and found no bad record about this guy. And he actually seemed like a serial entrepreneur, which gave me quite a lot of confidence in him. I checked the pitch deck, the company registration information, trademark etc., which all looked fine.
— Xinxi Wang [LTC] (@TheRealXinxi) March 27, 2018
In Asare’s AMA session on Reddit, he claimed to have studied law before owning and operating a number of businesses in the late decade. This included an ‘education infrastructure company that built a type of School Management System’, a ‘Construction Defect Claims Management company’ as well as a ‘Collaborative Learning Social Network’.
LitePay’s demise not unlike DAO
Litepay’s demise is no less saddening than any other business that has failed to live up to expectations but a slight consolation is the fact that it doesn’t seem to have been an outright scam.
The project was not funding by an initial coin offering (ICO) which means plucky investors were saved from Asare’s abrupt decision to pack up shop.
It’s a far cry from a number of ICOs that have ended up scamming people out of a lot money.
As ICORating’s Brian Keen points out in a recent column on Cointelegraph, there have been a number of outrageous exit scams that have left investors out of pocket.
The likes of Plexcoin and it’s owner Dominic Lacroix set the bar pretty high in terms of how far some fraudsters are willing to go to steal from unsuspecting investors.
In that case, Lacroix nearly ran off with $15 mln, before the US Securities and Exchange Commission (SEC) stepped in and froze the accounts of the company. Lacroix ended up in prison before he could run off with the millions he’d raised during the ICO.
Litepay’s downfall could be more closely attributed to the end of Ethereum’s Decentralized Autnomous Organisation (DAO) project in 2017.
The brainchild of Ethereum founder Vitalik Buterin, the DAO project promised to create a revolutionary funding model for Decentralised Apps (DApps) on the Ethereum blockchain. The project was launched and raised $150 mln in Eth tokens.
However, shortly after its launch, hackers found an exploit in the code and stole $60 mln worth of ETH from the project. The theft prompted an investigation by the SEC – which ruled DAO tokens were in fact securities and had to abide by federal laws.
What was hailed as a revolutionary fundraising project for Ethereum DApps all but ended there and then, not unlike LitePay.
Both projects were highly anticipated by the wider cryptocurrency community and their unceremonious endings gave a stark reminder of how difficult life is on the precipice of technological advancement.
Light at the end of the tunnel
While LitePay floats away into the ether, TenX have thrust to the fore and could well be the next champion for Litecoin support.
They’ve already launched LTC support on their Android and iOS platforms. They’re also planning to launch a TenX/Litecoin card. Tried and tested, TenX could step up to the plate and do what Litepay couldn’t – only time will show.
Meanwhile Litecoin trading launched on Korbit is a boon for the cryptocurrency. South Korea is a cryptocurrency trading hub, and the appetite for virtual currencies is still voracious. Finally garnering support in South Korea could have positive ramifications for LTC.