Litecoin Creator Charlie Lee Sells Stake Citing 'Conflict of Interest'

Litecoin founder Charlie Lee announced on Reddit today that he had divested most of his litecoins, which are an alternative to Bitcoin. He cited “a conflict of interest” for him to continue buying and selling Litecoin while tweeting about it because he has “so much influence.” Lee says he sold and donated all his litecoins, which makes it the first time in six years that he doesn’t own a single litecoin that’s not stored in a physical coin. He did not share the exact amount sold but said that he would continue to work on Litecoin and when the currency succeeded, he would “still be rewarded in lots of different ways, just not directly via ownership of coins.”

It’s uncommon for a founder of a major cryptocurrency to publicly divest themselves from their holdings. Satoshi, the founder of Bitcoin, remains obscured from the public eye, while Vitalik Buterin, founder of Ethereum, still owns a lot of ether and stays active on social media.

Many on Reddit doubted Lee’s intentions for divesting. One user wrote that he had lost faith in Litecoin after Lee’s divestment, saying, “Typically in finance, a founder selling out his stake is a very BAD indicator for his perception of future performance.” Some even hypothesized that Lee pulled out of Litecoin in order to invest more in Bitcoin Cash, and accused him of insider trading. Lee responded to such accusations with a tweet and an update to his Reddit statement, strongly denying that he had any involvement with the Coinbase Bitcoin Cash insider trading allegations. “Don’t worry. I’m not quitting Litecoin,” he wrote, then later added, “As you can see, some people even think I’m pumping Bcash [Bitcoin Cash] for my personal benefit. It seems like I just can’t win.”

One litecoin is currently worth $325.13, which is not a significant change from before Lee’s announcement yesterday. We’ve reached out to Lee for comment and will update this story if we hear back.

Steam No Longer Accepts Bitcoin Payments

Bitcoin is becoming so valuable and volatile that it's not possible to use it to actually sell things, according to one prominent online shop. Valve’s popular gaming and digital distribution platform Steam started accepting bitcoin payments back in April 2016, when the cryptocurrency was trading at about $450. The cryptocurrency’s surge seems to have made it too volatile and expensive for the platform to continue to accept it, as Valve announced on Wednesday it will no longer accept bitcoin payments.

In a blog post, the company revealed that the cryptocurrency’s fees have become too high for it to be accepted on the platform, as they lead to “unreasonably high costs for purchasing games with bitcoin.” The company’s blog post reads:

In the past few months we’ve seen an increase in the volatility in the value of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network. For example, transaction fees that are charged to the customer by the Bitcoin network have skyrocketed this year, topping out at close to $20 a transaction last week (compared to roughly $0.20 when we initially enabled Bitcoin). Unfortunately, Valve has no control over the amount of the fee.

Although most bitcoiners are well aware of how the network works, Steam is also worried about its volatility. Since the cryptocurrency’s value keeps rapidly changing, and the amount of bitcoin used to purchase a game is only guaranteed by the marketplace for a limited period of time, if the customer doesn’t finish the purchase during that period, the amount of bitcoin needed to purchase the game can then be significantly different. Steam’s blog post adds that the platform usually solved the problem by either refunding users, or asking them to transfer additional funds to cover the remaining balance. The solution is no longer feasible, as additional transactions incur more costly transaction fees, and may not immediately solve the problem as bitcoin’s value could keep on fluctuating. For these reasons, Steam’s post ends stating that “at this point, it has become untenable to support bitcoin as a payment option.” The company adds that it may re-evaluate if accepting the cryptocurrency makes sense at a later date.