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Clarifications on Litecoin Foundation and TokenPay Swiss AG partnership

Clarifications on Litecoin Foundation and TokenPay Swiss AG partnership

Litecoin Reddit

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I want to clarify some things about recent events.

First of all, please note that there is a difference between Litecoin and the Litecoin Foundation. Litecoin is a decentralized network and currency. Litecoin Foundation (LF) is a centralized non-profit organization whose mission is to advance Litecoin development, adoption, and usage. I am the creator of Litecoin and the Managing Director of the LF. I know this causes quite a bit of confusion, but hopefully I can set the record straight. Litecoin doesn’t need LF or me for that matter, but I’m working hard with LF to make Litecoin a success. If LF is not doing a good job, nothing prevents another organization to step up and do better. This exact situation actually happened last year when the LF came into existence because the Litecoin Association wasn’t doing a good job. When you invest in Litecoin by buying LTC, money doesn’t go to fund LF in any way. In some ways, LF is working for you for free to help increase the value of your investment. Of course, we appreciate all the people who have donated to LF and those donations go a long way to further our success.

Last week, LF announced a partnership with TokenPay Swiss AG (TP) in a deal to acquire a stake in a German bank, WEG Bank AG. This partnership is between LF and TP. The deal is that LF receives the 9.9% stake in the bank in exchange for technical work and marketing support for TokenPay, eFin decentralized exchange, and integration with the bank. To be clear, LF did not pay any money for this stake in the bank. The plan is also for me to get a board seat at the bank.

There was a TPAY token sale last December. If you have been following me on Twitter, you know that I don’t like tokensales/ICOs. I don’t like ICOs because some of them are outright scams and most of them are set up to fail because of bad incentive structures. That said, TP did not run away with the their funds. Instead, they have used those funds exactly as they promised, and buying the bank is part of that promise. Further, through my interaction with Derek Capo, TP CEO, I have seen sincerity and real desire to increase crypto adoption. Given all that, I feel comfortable representing LF in making this deal with TP.

I want to now lay out the possibilities of this partnership, best case and worst case.

Best case is that with this bank, we are able to create and deliver crypto solutions like debit cards, merchant processing, and other innovative solutions. However, even with a stake and influence at the bank, it’s not guaranteed that this will succeed. People have brought up valid concerns that we still need to work with and be approved by players in the current financial systems like Visa and SWIFT, but we definitely have a much higher chance of succeeding now that we own a stake in a bank with bank licenses. And with a seat at the board of the bank, I will have some influence on the direction. Even if we are not able to do anything with this bank in terms of pushing crypto adoption further, we still have a stake in the bank and can benefit financially from it, which benefits LF and its mission. Worst case is of course that the partnership fails for whatever reasons. This would of course hurt LF’s reputation, but it would have no material impact on LF and, of course, it would have no effect on the Litecoin network and currency. Just like Bitcoin is not affected by Bitcoin Foundation’s failures, Litecoin is not affected by Litecoin Foundation’s failures. Of course reputation is important to people’s confidence in Litecoin Foundation and Litecoin and we understand that, but nothing successful ever happens without taking some risks. In this case, we believe that the potential gains far outweigh the risks.

If you have any further questions, please ask me and I will try to answer.

P.S. For transparency, neither the LF nor I have ever owned or plan to own any TPAY coins.

submitted by /u/coblee
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