Charlie Lee Clarifies Litecoin Foundation’s Acquisition of a German Bank on Reddit
Charlie Lee Clarifies Details About the Litecoin Foundation’s Acquisition of a German Bank on Reddit
Charlie Lee took to Twitter and Reddit today to clear up confusion about the partnership between the Litecoin Foundation and TokenPay.
Last week, the Litecoin community was astir as a partnership was announced between the Litecoin Foundation and TokenPay Swiss AG in a deal to acquire a stake in a German bank called WEG Bank AG.
Some members of the community took this to mean that Litecoin – the digital currency – was purchasing a bank. Others saw this as a way to promote the value of TPAY. Some saw it as a risky endeavor that could cause the value of LTC to plummet.
I posted some clarifications on the @LTCFoundation and @tokenpay partnership on reddit. Sorry for the wall of text! If you have any questions, please ask on reddit. https://t.co/8HSLAA4P36 pic.twitter.com/Sc6iuWEUbk
— Charlie Lee [LTC⚡] (@SatoshiLite) July 17, 2018
Lee clarified everything in a comprehensive Reddit post, then linked to the post from his @SatoshiLite Twitter account. He’s also continuing to answer questions in the Reddit thread.
“I want to clarify some things about recent events,” Litecoin creator Charlie Lee explained.
“First of all, please note that there is a difference between Litecoin and the Litecoin Foundation. Litecoin is a decentralized network and currency. Litecoin Foundation (LF) is a centralized non-profit organization whose mission is to advance Litecoin development, adoption, and usage. I am the creator of Litecoin and the Managing Director of the LF.”
It’s easy to get confused. Lee, a former Google employee, is the original creator of Litecoin (LTC). He’s also the Managing Director of the Litecoin Foundation. Litecoin and the Litecoin Foundation are two separate entities.
“When you invest in Litecoin by buying LTC< money doesn’t go to fund LF in any way. In some ways, LF is working for you for free to help increase the value of your investment. Of course, we appreciate all the people who have donated to LF and those donations go a long way to further our success.”
Lee Clarified How the German Banking Acquisition Will Work
Last week, the Litecoin Foundation announced a partnership with TokenPay Swiss AG in a deal to acquire a stake in a German bank called WEG Bank AG.
This partnership is between the Litecoin Foundation and TokenPay. Here’s how the deal works, as explained by Charlie Lee:
“The deal is that LF [Litecoin Foundation] receives the 9.9% stake in the bank in exchange for technical work and marketing support for TokenPay, eFin decentralized exchange, and integration with the bank. To be clear, LF did not pay any money for this stake in the bank. The plan is also for me to get a board seat at the bank.”
Lee Reveals He Owns No TPAY Tokens
Other members of the Litecoin community were concerned about Lee “shilling” TPAY tokens, the digital currency used on the TokenPay platform.
TokenPay held a token sale for its TPAY tokens last December.
Lee famously sold all his LTC earlier this year (when the coin was at an all time high of around $400). Some suspected that he had purchased TPAY or other tokens.
Lee explained that’s not the case: Lee claims neither he nor the Litecoin Foundation own TPAY tokens, nor have they ever owned TPAY tokens in the past.
Lee claims TokenPay used the funds raised from the ICO successfully. One of the promises made during the ICO was to purchase a bank. They have now fulfilled that promise.
The Best Case and Worst Case Scenarios of the TokenPay Partnership
Finally, Lee outlined the best case and worst case scenarios of the TokenPay partnership, including how things could go wrong – and how the Litecoin community could be affected.
“Best case is that with this bank, we are able to create and deliver crypto solutions like debit cards, merchant processing, and other innovative solutions.”
Lee added that success wasn’t a guarantee. A number of problems need to be solved. The team needs to work with players in the current financial ecosystem, including Visa and SWIFT.
Lee then explained the worst case scenario. “Worst case is of course that the partnership fails for whatever reasons.”
Even in this worst case scenario, the value of Litecoin wouldn’t suffer in a major way, so members of the LTC community should not be worried:
“This would of course hurt LF’s reputation, but it would have no material impact on LF and, of course, it would have no effect on the Litecoin network and currency. Just like Bitcoin is not affected by Bitcoin Foundation’s failures, Litecoin is not affected by Litecoin Foundation’s failures.”
You can view Charlie Lee’s full statements on the TokenPay partnership and bank acquisition here. He’s continuing to answer comments on Reddit throughout the day.