Litecoin, bad start to the week: that's what happened. The reasons for a performance to forget for the fifth cryptocurrency in the world.
Bad start to the week for Litecoin, With the criptovaluta who lost ground especially on Monday, after the news spread according to which LitePay (the system that processed payment transactions with the cryptocurrency) put an end to the operations, causing immediate justification by the founder of the digital currency.
In the minutes following this announcement, criptovaluta it lost about 10 percent, deepening a decline that for the entire month of March is about a third of its original capitalization.
Litecoin had instead tried to catch up in February, precisely in the wake of the announcement that the computer processing system LitePay payments it would come into operation on February 26. However, in an email sent to customers on March 5, LitePay she said she was still engaged in several evaluation stages. Since then, the company had not sent any updates.
Thus we arrive on Monday, when the Litecoin Foundation - a nonprofit organization that is in charge of developing Litecoin, and which is also among the main LitePay investors- said on its website that LitePay CEO Kenneth Asare informed that it had “ceased all operations and having started the procedures to sell the company ".
The Foundation said it declined Asare's request for further funding after a question / answer session on Reddit the 16 March had raised several requests for clarification on how the funds were used.
"Like everyone else, we were too excited for something that was too good to be true and we optimistically overlooked many of the warning signs," said Litecoin creator Charlie Lee in a tweet. "I'm sorry I have advertised this company and I promise to do better due diligence in the future" - he also added.
In February, Asare he said in an email to CNBC that his team has been working on the development of the project since the summer of 2017 and that his goal was "to create a way for merchants to be able to cash in Litecoin, a particularly useful cryptocurrency for payments" .
Recall that, despite the decline occurred, Litecoin it is the fifth most important cryptocurrency in the world by market capitalization, with 8,1 billion dollars of total value. “Litecoin was doing well before LitePay and will continue to do so "- specified the Litecoin Foundation on its website.
US regulators and corporations have taken action in recent months to crack down on fraudulent cryptocurrency activity. The U.S. Securities and Exchange Commission has frozen the assets of those involved in some token sales, and the State of Texas has issued numerous cessation orders addressed to cryptocurrency companies. This week, Twitter followed Google and Facebook to announce a ban on cryptocurrency advertising.