On July 10, the Litecoin Foundation (LF) and TokenPay, a decentralized multi-currency crypto platform, announced a partnership in which they acquired a 9.9% stake in Germany’s WEG Bank. After the announcement, there seemed to be confusion surrounding the deal’s details.
In order to clarify what the partnership with WEG bank entails, Litecoin founder Charlie Lee noted that the Litecoin Foundation and Litecoin (LTC) itself are two separate entities, as Litecoin is a decentralized cryptocurrency, while the Litecoin Foundation is a centralized non-profit group that focuses on Litecoin’s ongoing “development, adoption, and usage.”
Setting the Record Straight
In a detailed Reddit post, Lee revealed he aims to “hopefully…set the record straight” in that he’s “working hard with the LF to make Litecoin a success.” Moreover, another organization or individual may contribute to the cryptocurrency’s development at any time should they feel the “LF is not doing a good job.”
In fact, he noted that last year people felt the Litecoin association was not doing a satisfactory job, so that’s why the LF was established. Lee also wrote that when people buy Litecoin, no funds are used to fund the Foundation. Instead, he said, the LF is working “for free…to help increase the value of [its holders’] investments.”
Notably, this does not mean it doesn’t accept donations. As Lee states:
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 the partnership “between LF and TP” will mean the “LF receives the 9.9% stake in the bank.” In return, according to the Litecoin founder, WEG Bank gets technical assistance and marketing services needed to add support for TokenPay.
Additionally, Lee said the bank will receive support to launch an “eFin decentralized exchange”, along with the technical expertise required to “integrate” this new financial technology into its existing banking system.
Lee further clarified the “LF did not pay any money for this stake in the bank” and that “the plan is also for me to get a board seat at the bank.” Lee added that he isn’t a fan of initial coin offerings (ICOs) because “some of them are outright scams and most of them are set up to fail [due to] bad incentive structures.”
However, he noted TokenPay has been honest in their dealings by using the funds raised in their ICO to do what they had initially claimed they were going to do. That being, Lee touted acquiring stake in the bank will help increase cryptocurrency adoption.