Date
17 August 2018
Litecoin has rallied about 7,500 percent this year, making it the world's fifth-largest cryptocurrency with a market capitalization of more than US$17 billion. Photo: Litecoin.org
Litecoin has rallied about 7,500 percent this year, making it the world's fifth-largest cryptocurrency with a market capitalization of more than US$17 billion. Photo: Litecoin.org

Litecoin founder sells entire LTC holdings after 75-fold rally

Charlie Lee, who founded Litecoin in 2011, said he has sold off all of his Litecoin holdings over the past few days, citing a “conflict of interest” with him trading in a cryptocurrency over which he holds much influence.

Litecoin has rallied about 7,500 percent this year, making it the world’s fifth-largest cryptocurrency with a market capitalization of more than US$17 billion, according to Coinmarketcap.com.

Lee said on social media platform Reddit on Wednesday that he has “sold and donated” all of his Litecoin tokens over the past few days – except for some physical ones which he keeps as “collectibles”.

“Some people even think I short LTC (Litecoin)!” he said. “So in a sense, it is conflict of interest for me to hold LTC and tweet about it because I have so much influence.”

He explained: “I have always refrained from buying/selling LTC before or after my major tweets, but this is something only I know. And there will always be a doubt on whether any of my actions were to further my own personal wealth above the success of Litecoin and cryptocurrency in general.”

In an email answer to questions from Bloomberg, Lee insisted that he will “still working on Litecoin full time”, adding, “That hasn’t changed. If anything, I will be more focused and less distracted by price.”

Litecoin’s price has seen a significant upward momentum this month. At 12:50 p.m. on Thursday Hong Kong time, the cryptocurrency is trading at around US$328, having achieved a new all-time high of US$375.29 on Tuesday. It was just US$4.36 at the start of the year.

Trading volumes of the coin have also reached unprecedented levels at the end of 2017. The past 24 hours saw over US$1.7 billion LTC traded, according to Coinmarketcap.com.

Lee, a San Francisco-based software engineer, did not disclose the amount of tokens he has sold as of Wednesday but said it was a “small percentage” of the daily volume on the cryptocurrency exchange GDAX and “did not crash the market”.

However, he also said Litecoin’s price may now take a “short-term dip due to people losing faith, thinking that I’ve lost faith”. Nonetheless, the move will be good for the token in the long term, he added.

“Litecoin has been very good for me financially, so I am well off enough that I no longer need to tie my financial success to Litecoin’s success,” Lee said.

Asked how he felt taking profits at the height of the cryptocurrency boom, he said in his Reddit blog post that it was “weird” but also “somehow refreshing”.

“Don’t worry. I’m not quitting Litecoin,” Lee said. “I will still spend all my time working on Litecoin. When Litecoin succeeds, I will still be rewarded in lots of different ways, just not directly via ownership of coins. I now believe this is the best way for me to continue to oversee Litecoin’s growth.”

Litecoin was formed as an offshoot of Bitcoin in 2011. A Google employee at the time, Lee envisioned Litecoin as a cryptocurrency that would offer merchants a more convenient and faster way of completing transactions, according to Coindesk.

In an interview with CNBC on Dec. 14, Lee said he never liked to speculate on prices. “I’m always wrong. If I tell you it’s going to go up and it doesn’t, you’ll be upset.”

He said the meteoric surge in cryptocurrency prices is actually impeding its wider adoption as most people were using them as a speculative asset instead of using them to make real-world transactions.

“I think we’re still maybe five years away before people actually start using bitcoin and litecoin in real-world use as a currency,” he said.

In a recent tweet, Lee called for calm amid the market excitement. “I just want to warn people that they should invest responsibly,” he said. “Don’t spend all of your life savings to buy a cryptocurrency in case it drops 80 percent.”

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BN/CG

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