Litecoin Falls 10% after LitePay Ceases OperationsMarch 27, 2018
Payments processor LitePay has ceased operations, causing Litecoin’s price to drop 10%. The cryptocurrency is down 28.5% for the month and 37.5% for the year. LitePay CEO Kenneth Asare has already issued an apology for promoting the venture.
LitePay previously announced that its merchant payment processing system would be available on February 26. However, LitePay sent an email to customers on March stating that it’s checking for perspective merchants and postponing on card registrations due to the drastic actions and negative view of card issuers towards cryptocurrency companies. No update has been sent since then.
On Monday, 26th of March 2018, Litecoin Foundation stated on its official website that Asare informed the organization that he has stopped all operations and is getting ready to sell the company. Litecoin Foundation is a LitePay investor and a nonprofit organization for growing Litecoin. The foundation declined Asare’s request for additional funding after a Reddit session on the 16th of March incited questions about how the resources were being used.
Charlie Lee, creator of Litecoin, also apologized in a tweet. Lee said that they go too excited about something that’s good to be true and disregarded many of the warning signs. He vowed to do better due diligence in the future. Lee has already sold and donated almost all of his Litecoin assets.
According to CoinMarketCap, Litecoin is the 5th biggest cryptocurrency by market cap at 8.1 billion. It has grown in popularity due to the demand for alternative currency options. Litecoin works just like standard world currencies. It is also traded by seasoned and new investors alike. Litecoin can be used to buy and sell products and services such as clothing, electronics and food. It is only used online, so the cryptocurrency’s value is influenced by demand on currency trading sites. Litecoin is different from Bitcoin in several ways. One of these is that Litecoin can be purchased faster than Bitcoin. Litecoin’s limit is set to 84 million, while Bitcoin’s is only 21 million. The Litecoin Network also tries to process a block every 2.5 minutes, whereas Bitcoin’s processing time is 10 minutes. The cost is expected to be lower as Litecoin becomes more popular. Litecoin uses the scrypt algorithm, so the ASIC and FPGA devices designed for mining Litecoin are more expensive and complicated to create and produce than the devices used for Bitcoin.
Litecoin has experienced significant growth since its launch. In November 2013, its aggregate value increased 100% in 24 hours and its market cap reached $1 billion. Litecoin adopted Segregated Witness in May 2017 and completed the first Lighting Network transaction within the same month.
However, the value of Litecoin and other cryptocurrencies dropped after companies and regulators started taking steps to take firm action on deceitful activities in cryptocurrencies. Bitcoin dropped 7%, Ethereum is down 45%, Bitcoin cash is 29% lower and Litecoin has dropped 40%. Cryptocurrency companies in Texas have been given cease-and-desist orders. Twitter, Facebook and Google have also banned cryptocurrency ads to prevent fraudulent activities.