A much hyped BitPay like payment processor for litecoin has suddenly closed shop according to an announcement by the Litecoin Foundation.
“The Litecoin Foundation was contacted by Kenneth Asare, CEO of LitePay, informing us that he has ceased all operations and is preparing to sell the company,” they say.
The foundation had apparently invested $50,000 in this company despite Asare having previously founded a company that was FTB Suspended, which means:
“The business entity was suspended or forfeited by the Franchise Tax Board for failure to meet tax requirements (e.g., failure to file a return, pay taxes, penalties, interest).”
“We apologize for not doing enough due diligence,” the Litecoin Foundation said after they explain what appears to be the reason for LitePay closing down:
“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.”
It’s unclear what part of the AMA exactly made them suddenly suspicious, but we think it might be this answer in reply to a question highlighting the company does not appear to have a “face.”
Something which might suggest their due diligence was non-existent because the website appears to have been up since December, with Charlie Lee saying in late January:
“Litepay is not a rumor. They have announced that they will launch in February.”
Interestingly, on March the 5th the Express published an article which says “LITECOIN is poised to launch its exclusive transaction processor – LitePay – next week to consumers.”
That article seems to be based on “a Litecoin press release.” We haven’t received such press release, but perhaps they meant the Litecoin Foundation.
“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,” Charlie Lee, litecoin’s founder, said.
It’s unclear why he thinks a mere BitPay clone is somehow too good to be true, but apparently this isn’t the only slip up.
More generally, Lee has gained attention for making comments like this: “LTC will surpass BCH without LitePay’s help.”
Not might, not could, not I think or believe, or stupendously likely, but a definitive it will. His crystal ball however does not seem to be working very well because just six days ago he said: “[LitePay] are signing up merchants right now.”