Litecoin dropped Monday after news that payments processor LitePay has ceased operations, prompting an apology from the coin’s founder for promoting the start-up.
Litecoin rallied in mid-February, partly due to LitePay’s announcement that its merchant payment processing system for litecoin would go live on Feb. 26. But in an email to customers on March 5, LitePay said it is still “checking all perspective merchants” and is holding off on card registrations “due to the negative perception and drastic actions card issuers have towards cryptocurrency companies.” The company has not sent out an update since.
On Monday, the Litecoin Foundation, a nonprofit for advancing litecoin and an investor in LitePay, said on its website that LitePay CEO Kenneth Asare informed the organization a “couple days ago” that “he has ceased all operations and is preparing to sell the company.”
The foundation said it refused Asare’s request for further funding after a Reddit “Ask me anything” session on March 16 raised questions about how the funds were being used.
“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,” litecoin creator Charlie Lee said in a tweet. “I am sorry for having hyped up this company and vow to do better due diligence in the future.”