In a catastrophic development this morning, it was revealed that LitePay, a soon to be operational payment vendor facilitating Litecoin payments, is going to close shop altogether.
The news came to light through an announcement made by the Litecoin Foundation.
Elaborating on the development, the Litecoin Foundation explained to the community that LitePay CEO Kenneth Asare had contacted the foundation to notify everyone about ceasing all operations of LitePay.
As per the updates, Asare is now planning to sell the company.
This Litepay Litecoin situation brings up a couple of fundamental questions about accountability.
After disastrous reddit ama, Litepay is no longer operational
During its launch, LitePay was supported wholeheartedly by the Litecoin community, who looked towards the solution as the equivalent to BitPay – that worked wonders for Bitcoin and made its adoption possible in several industries.
However, things started to go south when Asare held an AMA session on Reddit.
The AMA opened doors to more questions than answers after Asare avoided direct answers to basic questions such as team size, merchant sign-ups, and developer documentations.
Afterwards, the community expressed skepticism about the project that had once been backed by the Litecoin Foundation.
The situation has now ended in chaos with Litecoin apologizing to its community members.
“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 foundation wrote.
The community members are now afraid of the effects this will have on Litecoin’s value, even though the Litecoin Foundation suggests that things will sail smoothly.
“Litecoin was doing perfectly fine before the promise of LitePay and will continue to do so. 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 Aftermath of Litepay Litecoin
An analysis of this Litepay Litecoin debacle highlights a few key issues, accountability and due diligence in a decentralized world. One thinks what sort of impact will this have on the price of Litecoin, as Litepay was supposed to provide a necessary service in facilitating payments and contributing to the growth of Litecoin. The growth of Litecoin would then lead to a potential spike or gradual increase in price as it would allow for more use of the currency.
Yet, the Litepay Litecoin incident does show that there is a need for accountability and further due diligence in parties that work with a foundation. For, if there is no true due diligence, expected results and yields might not be present, if this is done a repeated basis, it would have negative ramifications for the larger cryptocurrency industry.
Is there a solution to this potential issue that could certainly arise in another Litepay Litecoin incident? If so, what could a solution be?
Here’s a thought. A firm that acts in an audit capacity with foundations, ensuring that projects that are using the funds of the foundation, are indeed using them for the right purposes and moving the project and the ecosystem further.