Charlie Lee announces intent to make Litecoin fungible and pursue confidential transactions

In what is welcome news for many in the cryptocurrency, and especially the Litecoin community, Charlie Lee today announced that Litecoin will be made more fungible, and that confidential transaction features will be implemented in a future release of the full node. Although Lee hasn’t put forward a specific time-frame for the release, he did suggest that he expected it to be implemented sometime in 2019.

Charlie Lee has long been interested in fungibility and incorporating Gregory Maxwell’s Confidential Transactions features to Litecoin. Confidential Transactions, in his opinion, offer a comprehensive solution to Litecoin’s fungibility problem and will finally allow it to be recognized as sound money. Now it would seem, however, that Lee has moved on from SegWit and is moving ahead to soft fork this in.

 

Source: Twitter

With Confidential Transactions, users will no longer be able to find out how many coins the other party owns, a useful tool for individual privacy and the security of financial transactions. This feature, like Zcash, will be optional only initially and not mandatory like Monero as although the latter offers more privacy and fungibility, it is difficult to achieve via consensus.

Charlie Lee also confirmed that Taproot, a feature that offers smart contract flexibility and more privacy options will also be part of such a release when ready. Taproot uses the Schnorr signature and combines it with the Merkle tree to offer more privacy solutions to the ever-increasing network and was first offered to be implemented on the Bitcoin network.

Source: Twitter

The move to add CT and make Litecoin more fungible does have its detractors, however. For instance, many on Reddit have pointed out that block size will be thrice the present size after CT is implemented (Charlie Lee has suggested that it isn’t a present concern though). Some have also suggested that making the CT and privacy features an opt-in would defeat the entire purpose of the development as often, users don’t even use them because of the added formality to a transaction.

Fungibility, or the ability of a good to hold equal value when interchanged with individual units of the same good has long been an issue for cryptocurrencies such as Litecoin and Bitcoin. Bitcoin, in fact, has long suggested that it is fungible. However, the fact that the Bitcoin blockchain’s pseudo-anonymity allows anyone to differentiate between clean and tainted coins, making the former more valuable than the latter, adversely affects the coin’s fungibility.


Source
Author: Jibin M George
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Litecoin Creator Correctly Predicted Price Crash Back in December Last Year

Charlie Lee, creator of Litecoin predicted back in December that Litecoin could crash to $20. Now in November, we are pretty close to seeing that price in reality.

It is no secret that Charlie sold all of his Litecoin holdings at the peak price, he received a lot of backlash from the community at the time and to this day people still criticize him. But it is less known that he predicted a multi-year bear market with Litecoin’s price dropping to as low as $20.

Charlie Tweeted:

“Ok, sorry to spoil the party, but I need to reign in the excitement a bit… Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can’t handle LTC dropping to $20, don’t buy!”

Unfortunately, a lot of people ignored Charlee’s advice and were in the Euphoric stage at the time. But his prediction is pretty much on track to be true.

Even though the price more than doubled in a week after his prediction, it has dropped over 93% from the peak price of $366 to a low of $27 rhyming the previous bear market.

Litecoin’s Price After Charlie’s Prediction:

Image Source: Coinmarketcap

It turns out that Charlie took the right decision of selling the top at the time. He has justified his selling multiple times saying that it has nothing to with his belief in Litecoin but has to do with having a conflict of interest.

He wrote at the time:

“it is conflict of interest for me to hold LTC and tweet about it because I have so much influence. 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 crypto-currency in general,”


Source
Author: Shrikar
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John McAfee Tweets to Sooth the Souls of Nervous Investors

Controversial investor and software guru took to Twitter this week to calm the jangling nerves of Bitcoin investors after a tumultuous week left the flagship cryptocurrency hovering above USD 4,000.

Investors may ask “why listen to John McAfee?” but they might just take a look at a recent study which revealed that the 73-year-old tech veteran was found to be the most influential figure in terms of trustworthiness when it comes to handing out trading advice. In second place, the study placed Ethereum founder Vitalik Buterin, followed by Litecoin creator Charlie Lee.

In his latest tweet, McAfee makes an analogy to the bear market and winter, arguing that a “glorious spring” is around the corner, attributing the current market disruption to confusion. He points out that investors are joining the market daily, regardless of current trends and blames the current market turmoil on institutions who took “absolutely unenforceable measures to allay their fears.”

Market forces will “burn out” in time, McAfee suggests and encourages the global cryptocurrency community to stick with cryptocurrencies in the long term, echoing the views of Blockstream’s CEO Bobby Lee, who suggested that Bitcoin could still threaten USD 3,000, but long-term, feels it will overtake gold:

“This bear market might last another 18+ months, until the next block reward halving. That’s a long time for everyone except true believers. Enough time to scare away all of the weak long positions.”

Lee certainly has an ally in venture capital partner Lou Kerner from CryptoOracle who sees gold eventually being surpassed by Bitcoin. He compared the current market instability to the early 2000 dot com burst but makes an analogy to strong coins such as Bitcoin and Ethereum and companies such as Amazon who survived the bubble and emerged to become giant players in today’s tech markets. Kerner calls Bitcoin “the greatest store of value ever created.”

As to the recent drop in values, Kerner argues that “crypto has been so weak because [for] most of it there is no underlying value outside of confidence.”


Source
Author: Harold Vandelay
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Litecoin [LTC] creator, Charlie Lee says: ABC vs SV fork will test the Nakamoto Consensus

On November 14, Charlie Lee, the creator of Litecoin, posted a tweet about the Bitcoin Cash hard fork which is scheduled today. He stated that the fork will be a good real-world test of the Nakamoto consensus. The crypto-community is filled with speculations about the upcoming fork of Bitcoin cash, which will cause it to fork into Bitcoin ABC [supported by Roger Ver, Jihan Wu] and Bitcoin SV [supported by Craig Wright].

Charlie Lee, in his tweet, spoke about miners moving back to mining Bitcoin if BCH dies, and an entity gaining enough hash power to execute a 51% attack on the competing fork.

The ‘Hash War’, so called because the upcoming fork has a conflict of interest between Jihan Wu and Craig Wright. The person who controls the majority hash power after the fork will have the upper hand, thus the fork with the highest hash power will be validated and accepted.

Nakamoto consensus is a set of rules defined by Satoshi Nakamoto in the Bitcoin whitepaper, which determines which block is validated and added to the blockchain. The blocks are added by miners through PoW.

The voting consensus defined in the Bitcoin whitepaper is very similar to the election of the president, i.e., one CPU is equivalent to one vote and Proof-of-Work [PoW]. Any alteration or addition to the Bitcoin network has to be implemented by hash power, so without the hash power, it is impossible to come at a unanimous decision. The Bitcoin whitepaper states the same:

“Proof-of-work is essentially one-CPU-one-vote. The majority
decision is represented by the longest chain, which has the greatest proof-of-work effort invested
in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the
fastest and outpace any competing chains”

According to Lee, if either of the teams, gain enough mining power, they could fatally damage the forks by executing a 51% attack. If the miners gain control of the hash power above 50%, it means that they could stop the transactions from going on the block, thus stopping payments between parties.

Additionally, they would have enough hash rate to reverse the transactions. Since they have control of the network, they could also double spend the coins. So successfully gaining hash rate by either party could be used to destroy the competing fork.


Source
Author:  Akash Girimath
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36% Of BTC In Circulation Is Lost, Making Bitcoin Technically More Scarce

In new findings by two research firms – Chainalysis and Diar – data has been made available on the reality of the amount of Bitcoin (BTC) actually available in circulation for the regular guy like you and I. According to coinmarketcap.com, the circulating supply of BTC stands at 17,296,587 at the moment of writing this. The findings go on to state that 36% of this amount is ‘lost, likely lost, or unmined’. Doing the math, this then means 6.226 Million BTC is technically unavailable for purchase or trading to even the Bitcoin whales.

The report goes on to state that 22% of the circulating supply is held by speculators, while investors hold a 30% stake in the circulation supply. These values amount to 3.8 Million and 5.189 Million Bitcoin in circulation respectively.

Bitcoin Can Be Declared More Scarce than Many Would Have Thought

Using the above figures, and knowing the hard-cap on the mining of Bitcoin is set at 21 Million, we can declare with some confidence that Bitcoin is technically scarce. This is given the fact that 6.226 Million BTC is technically unavailable. There is also the 3.704 Million BTC that is yet to be mined. We are therefore left with a very small percentage of the digital asset to satisfy the interest of global investors.

Charlie Lee Might Just Be Right

In a tweet back in mid July the founder of Litecoin, Charlie Lee, had urged crypto traders and enthusiasts to first strive at owning 1 BTC before owning any other coin in the crypto verse. His exact words and tweet can be seen below.

There will be at most 21 million bitcoins in existence. There isn’t even enough BTC to go around for EVERY millionaire to own one.

So before you buy any other coin (LTC included), try to own at least 1 BTC first.

Once you have 1 BTC, buy all the shitcoins you want!

Bitcoin’s Future

The fact of the matter is that Bitcoin has attracted the interest of institutional investors from Wall Street such as Bakkt and CBOE who have a pending Bitcoin ETF application at the SEC. This in turn means that looking at the performance of BTC in the last few days, Billionaire investor Michael Novogratz might also have been right when he confidently state that Bitcoin had reached a bottom on the 12th of September and at $6,200.


Source
Author: John P. Njui
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Crypto Hedge Fund vs. Litecoin and its Creator

In a new research report, written by Tushar Jain, managing partner of Multicoin Capital, the crypto hedge fund reveals that it has taken a bet that Litecoin will decline in price by shorting the coin widely considered to be “the silver to bitcoin’s gold.” The fund argues that “Litecoin is a relic of the pre-smart contract platform crypto ecosystem.” Litecoin creator Charlie Lee dismissed “concerted effort to suppress Litecoin price” as FUD “by groups that see Litecoin as a threat.”

Proponents of Litecoin often argue that it serves important functions in the crypto ecosystem by functioning as a testnet for bitcoin and being fast and cheap medium of exchange for everyday payments.

Multicoin, however, does not share the view that Litecoin is a viable medium of exchange (MoE), writing that “Litecoin is not uniquely positioned to become a MoE and there is no substantial evidence of its adoption.” The report further pointed out that the Litecoin Foundation’s specific payment processor, Litepay, “ceased operation” in March of this year, which further lowered the usefulness of Litecoin as a medium of exchange.
Also, Multicoin writes that the Litecoin Foundation is also close to running out of capital necessary to continue development of the protocol. Currently, the foundation owns assets worth only about USD 322,000, of which 82% is held in LTC. The report further notes that although Litecoin has “not been completely abandoned by developers, […] no new material developments that can be attributed to Litecoin.”

The fund expects these “multiple strong negative catalysts over the coming months”:
Growth in Coinbase listings rapidly diminishing Litecoin’s position as the comfortable entry point into crypto for naive investors who don’t understand that you can purchase fractional coins
* Increased usability and higher capacity of Bitcoin resulting from Segwit and Lightning * * * Network adoption
* Viability of Lightning Network as a payment rail
* No differentiated roadmap for LTC
* Persistent selling pressure due to mining
* Bitmain reportedly owns over 1M LTC and is likely to sell the LTC to continue their support for BCH

However, the Litecoin creator took to Twitter to defend the cryptocurrency in a series of 11 tweets.
According to Lee, Litecoin “has one of the most secure networks of all altcoins”, “has a ton of liquidity”, and is supported by 9+ payment processors which makes it “extremely easy for merchants to accept LTC”.
Also, he stressed that Litecoin processes USD 200 million worth of transactions each day and “the network has worked flawlessly for 7 years.” Moreover, Lee claims that “Litecoin will always be the cheapest and fastest on ramp to Lightning Network.”

Also, not everyone shares the same view as Multicoin. Back in August, Mati Greenspan, senior market analyst at the social trading platform eToro, wrote in a report that he believed Litecoin was trading at a “massive discount,” while recommending investors to buy the coin.
The analyst argued then that Litecoin is one of the most liquid cryptocurrencies in existence, has a large market cap, and acts as an important gateway from fiat currencies and into the world of crypto, while adding that retailers are increasingly accepting Litecoin as payment.

Litecoin’s market capitalization currently sits at around USD 3 billion. With a price per coin of about USD 54, Litecoin is now down 87% from its peak of USD 420 on December 12 last year after an extreme run-up in prices during that month.


Source
Author: Fredrik Vold
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Charlie Lee on the Game Plan for How Litecoin, Bitcoin and Crypto Can Replace Fiat

In a fireside chat with Thomas Hu, founder of Kyber Capital, Litecoin founder Charlie Lee sat down with CoolBitX CEO Michael Ou to analyze what it means to be your own bank by using cryptocurrencies and their underlying blockchain technology. They cover issues surrounding mainstream adoption, stablecoins and certain features that can improve Bitcoin and Litecoin.

“If people are using cryptocurrencies instead of other forms of money like fiat, then we’ve achieved mass adoption,” says Lee. He adds that it’s going to be a long road and that the crypto community is making a lot of improvements. Last year he pushed for second-layer solutions such as SegWit and the Lighting Network to help with scaling, speed and privacy. As engineers work behind the scenes on delivering a more robust system, he says the key is the UX and making it easy for people to use.

“With cryptocurrency you are your own bank, so you have to actually protect your own coins. And a lot of people have failed to do that and lost coins because they stored it on an exchange that got hacked or they used an insecure wallet or they printed it out on a piece of paper and lost it. So it’s very easy to lose your funds from hacking or by accident. So hardware wallets, especially easy ones to use like CoolWallet, is a really important step towards making it easy for regular people to secure and spend their coins.”

 

Ou breaks down the full scope of financial freedoms cryptocurrencies can bestow on users.

“Being your own bank is apparently one of the greatest ideas ever since we’ve had traditional financial systems because with wallets like the ones we’ve built, the meaning of being your own bank becomes literal. There will be no one able to stop you from sending your money to somewhere you want or there will be no one able to freeze your assets, and there will no one to tell you, ‘Ok, today you can only send $500 to your friends somewhere else.”

Hu asked Lee and Ou if they believe that crypto developers have not been clear enough about what it means for people to be their own bank. Since mainstream institutions already have brand recognition and some degree of trust among consumers, and now that they’re “trying to come in to take control of the industry, to some degree,” are crypto organizations like Litecoin well positioned for mass adoption.

Lee explains how Litecoin can become a major force for mass adoption and why the trade-off isn’t necessarily between using the custodial services of a bank or rejecting banks and standing alone, assuming all risk, to become your own bank.

“I see Litecoin as complimenting Bitcoin to serve alongside Bitcoin as sound money. I think that with being your own bank, it’s true that with cryptocurrency you get freedom of money so you have control of your own funds. So no one can tell you that you can’t spend money to play poker online, for example. But also, with that, you have to protect your own money. But that doesn’t mean third-party solutions can’t help.

Hardware wallets or even centralized solutions can help secure. So you have bank-like products like Coinbase, for example, where people trust them to secure the funds for you. So you deposit your funds with them. But the great thing about cryptocurrency is that it’s open. You can always pull your money out of Coinbase and put it somewhere else if you don’t like them. So transferring on the blockchain, the Bitcoin Litecoin network, is secure and it’s not censorable.”

According to Lee, there’s no one-size-fits-all approach to managing your coins. Consumers have a number of options and they can choose the method that works best for them.

“So there will be some people who actually hold all their coins themselves. It’s kind of like holding cash in your house under the mattress. You can always do that if you choose to. You have to protect it yourself. Or you can put it in a ‘crypto bank’ and have other people help you protect it. Or you can use hardware wallets and make it a lot safer. So I see multiple ways to achieve mass adoption where people can use crypto without really being a security expert themselves.”

Regarding stablecoins, Lee says they’re a part of the USD market and that they’re not taking any market share away from Litecoin, Bitcoin or any other cryptocurrency.

“I’m not sure if there will ever be a decentralized stablecoin that actually works,” he says. “But definitely there will be centralized stablecoins like Tether.”

Lee believes stablecoins could also be used to spend like regular money, if that’s better for merchants. Consumers can then choose, for example, to hold Bitcoin or Litecoin, if they believe it’s the better store of value, and then convert their investments to a stablecoin to spend.

“Governments, and even potentially the US government, might do their own stablecoin,” says Lee, “and that’s going to be a really powerful coin because it’s backed by the government. And that’s fine because fiat is backed by the government.”

Creating more options and more interoperability strengthens the cryptocurrency ecosystem. Lee points out that the Lightning Network, in addition to tackling scalability, is important because it can connect different currencies like Bitcoin and Litecoin. That allows someone to send Litecoin, in a decentralized manner, and then the recipient receives Bitcoin, and vice versa. So if a merchant only accepts Bitcoin and a customer only has Litecoin, the transaction can still happen.

“I think fungibility is one of the main features of money that is missing in cryptocurrency, or at least in Bitcoin and Litecoin, and I think that’s something I want to see improved where people have their privacy when spending money. So eventually, if people get paid in cryptocurrency or if you get your salary in cryptocurrency, you don’t want to expose that to Starbucks when you buy a cup of coffee. Because right now, you will. If you spend that money to buy something, the recipient will see it publicly on the blockchain, and see how much money you have.”

In addition to adding privacy features to Bitcoin and Litecoin, Lee would like to see other scaling solutions. “For mass adoption, Lightning Network is one way to scale. There are other ways to help scale the network to support a lot more users.”

The Litecoin Summit will be held on September 14-15 at the South San Francisco Conference Center.


Source
Author: Daily Hodl Staff
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Video Credit

Litecoin Creator Charlie Lee Recommends Buying Bitcoin in Bear Market

The cryptocurrency market has now been in a bear cycle for more than two-thirds of the past year, and, as August prepares to roll in September, predictions from past months that the bitcoin price would test its all-time high in 2018 appear less and less likely.

LIONBIT

However, even after this prolonged decline, Litecoin creator Charlie Lee says that the flagship cryptocurrency is still a good buy.

Speaking with CNBC, Lee said that the dropoff in prices has created an excellent investment opportunity for long-term bulls who have cash-in-hand that they can afford to lose.

“It’s always good to buy on the way down to dollar-cost average your buy-in,” he said. “As long as you don’t spend money that you can’t afford to lose, I think that’s fine.

The former Google and Coinbase engineer cautioned against using borrowed funds to invest in bitcoin, a practice that became disturbingly common during last year’s fevered Q4 rally, noting that it’s incredibly difficult to predict short-term price movements and bear markets can in some cases endure for years.

TIP

He said:

“It’s hard to predict prices. I’ve been in this space for seven years now. I think sometimes it comes back within six months to a year, and sometimes it takes three or four years.”

Lee further noted that, at present, cryptocurrency prices primarily reflect speculative interest, not actual consumer adoption.

“It’s all about speculation these days, but, in the future, the price will reflect the success of the currencies,” he said, adding that there has been quite a bit of adoption this year even as prices have waned.

However, when asked if he would be buying back into litecoin (he sold all his LTC back in December, citing a conflict of interest in having the ability to swap price movements with his public statements), Lee said no:

“I sold because of conflict of interest, so I’m not going to buy my litecoins back anytime soon — or at all.”


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Josiah Wilmoth
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Peoples Token

BitMEX Research: 2018’s Crypto Rollercoaster Ride

The research department of leading exchange BitMEX posted a video reflecting their new “cryptocurrency pricing model” — a novel depiction of an investor’s rollercoaster ride.



With a daily trade volume of nearly $1.5 billion, the Seychelles-registered outfit is the largest Bitcoin-to-USD exchange in the world.

Posted on the Twitter feed of BitMEX Research, the 24-second clip displays a Lego roller coaster with a sign reading “HODL” overarching the track, just prior to the plunge. Invariably a nudge towards to the research body’s “price projections for 2019”, the passengers (presumably investors) rise again after the descent.

Bullish BitMEX?

While punters may view the video as noting bullish sentiment, BitMEX Research’s official stance would be to have no position. Typical findings are published in what the group describes as “unbiased, evidence-backed reports”,  or noted on the BitMEX Research Twitter.

Previously, the outfit reported that Bitcoin’s price may be correlated with traditional assets — and not, in fact, immune to turmoil in markets such as the S&P 500 stock market index. In conclusion, BitMEX’s March 2018 ‘Bitcoin Price Correlation’ report states:

“It appears that Bitcoin has been a reasonably non-correlated asset class throughout its history. During the recent rally to a valuation of hundreds of billions of dollars, however, correlations — and, crucially, correlations to risk-on assets — started to increase.”

All questions of sentiment aside, the jaunt appears to have been met largely in good heart by investors. Facing a correction of nearly 79% from Litecoin’s January 2018 all-time-high, the coin’s creator Charlie Lee tweeted in response:


Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!
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Author: Jonnie Emsley
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Why Litecoin’s Creator Is Buying Into a Bank (And How It Could Go Wrong)

One of the most unusual and potentially transformative deals in the cryptocurrency space started as an argument on social media.
Back in April, Charlie Lee, the creator of litecoin, was exchanging barbs on Twitter with Derek Capo, the CEO of payment processor TokenPay. But their fight quickly turned into a friendly exchange of direct messages, in which the two crypto enthusiasts realized they shared a common problem: In a word, banking.
Both the Litecoin Foundation, the non-profit that promotes the sixth-largest cryptocurrency and where Lee is a managing director, and Capo’s Virgin Islands-based startup had encountered difficulty securing bank accounts – a longstanding problem for the industry.
“We had lots of trouble” on that front, Lee said.



Capo elaborated: “Some banks, they close down bank accounts if they get a whiff of anything to do with crypto. We saw a lot of competitors with similar offerings get cut off because they didn’t own the bank and they didn’t have control.”
But Capo was working on a solution for TokenPay by trying to buy a bank. And he realized this plan, if successful, could address another problem for Lee.
“Why don’t we talk about having a litecoin debit card so that you’ll have a real solution?” Capo recalled telling him. “Because, you know, they had been trying very hard to have a litecoin debit card… I said, why don’t we talk?”

That is how the Singapore-based Litecoin Foundation ended up owning 9.9 percent of WEG Bank AG, an until-now obscure German financial institution, in a surprise transaction revealed this week.

But the foundation didn’t put money in; TokenPay previously acquired the stake and traded it to the non-profit in exchange for future technical support. TokenPay also acquired another 9.9 percent (the maximum allowed in Germany without prior regulatory approval) of WEG and is seeking the green light to buy up to 80 percent. (The price was not disclosed.)

If all goes according to plan, not only will TokenPay and the Litecoin Foundation have a reliable banking partner, they would also transform WEG into an on-ramp for consumers worldwide who want to trade fiat for cryptocurrency or pay for goods and services with crypto.
But owning a bank, by itself, won’t necessarily solve crypto’s banking problem, according to compliance experts who’ve worked in both fields. Even if the regulators bless the pending takeover, Capo and Lee may face new challenges operating in a heavily regulated industry where “coin” is frequently treated as a four-letter word.

Undaunted by regulatory hurdles, Capo and Lee have ambitious plans to usher in a new wave of crypto banking services.

Stepping back, while transacting in cryptocurrency may be frictionless, converting from dollars or euros to crypto and back is anything but. Buying crypto through an online exchange can mean registering a credit card with an exchange platform, then waiting days, sometimes longer, to complete the transaction.

Meanwhile, most of the merchants that accept crypto are wary of the price volatility and generally rely on a payment processor like BitPay to convert it to fiat. All these options incur processing fees along the way.
That’s why Capo wants to offer crypto debit cards and the ability to convert litecoin to euros directly through a traditional bank account, to make it a smoother experience for crypto users transacting in a fiat-dominated economy. He hopes to offer such services within nine months of receiving regulatory approval for the acquisition.
“Connecting cryptocurrency to fiat rails is very useful,” said Lee, who told CoinDesk he aims to join the WEG board as the Litecoin Foundation’s representative (a move that would make him possibly the first person to simultaneously hold the titles of “cryptocurrency founder” and “bank director”).

“We will have a say in influencing the bank to work on crypto projects,” he said.
Eventually, after tackling debit cards and payment processing, Capo and Lee plan to integrate banking services directly with TokenPay’s decentralized exchange (DEX) platform, eFin, which offers peer-to-peer trading between cryptocurrencies.
If traders pass all the know-your-customer (KYC) and anti-money-laundering (AML) demands for a crypto bank account, they will be able to seamlessly cash out TokenPay’s own token, known as tpay, from the exchange as fiat, plus buy or sell cryptos like litecoin without delay.
“eFin will have LTC. We will help them with it technically,” Lee said. “And they will also airdrop [eFin] tokens to litecoin users.”

In addition to the promise of technical expertise and litecoin’s relatively stable popularity among cryptocurrency fans, Capo said he gave the nonprofit equity in the bank based on Lee’s massive online following, a marketing boon, and professional connections.
“Litecoin has a very influential leader, someone who’s been around for a very long time,” Capo said in describing Lee, an alumnus of the popular cryptocurrency exchange Coinbase.

Yet even if they obtain a banking license, Capo and Lee are not guaranteed unlimited liquidity.
Located in the town of Ottobrunn (population: 21,378), WEG was previously a property management bank that offered loans to housing associations. After TokenPay acquires a majority stake, the plan calls for the bank’s CEO, Matthias von Hauff, to stay involved as WEG transitions to a retail bank with more consumer-facing products and services.
But such a tiny institution likely would likely rely on outside organizations – larger global banks, the German central bank, or SWIFT – to be able to move large amounts of fiat around the world, according to Simon Taylor, a former Barclays banker and co-founder and director of the U.K. fintech advisory firm 11:FS. If those partners became squeamish about crypto in general, they could cut off WEG’s access to fiat, Taylor cautioned.
“The really, really big banks tend to be the ones that connect you through the global corridor to the U.S. dollar, they’re the ones that get the big KYC fines,” Taylor said, adding, with regard to the WEG acquisition plan:

“I don’t think it’s going to achieve what they want it to achieve. I get the temptation to buy a bank. But buying a bank doesn’t give you what you think it gives you.”
Joe Ciccolo, president of the compliance service provider BitAML Inc., said regulators would probably expect extra diligence on WEG’s part if it were to become a crypto-focused bank.
“On its own, running a bank and implementing AML anti-money laundering] across a broad range of products and services is difficult to begin with,” Ciccolo said. “This is going to be a much higher barrier to entry than one would associate with traditional AML.”

The idea of integrating a decentralized exchange into a bank gave Ciccolo the most pause. He described DEXs as “nails on a chalkboard for regulators,” who have taken years to wrap their heads around bitcoin. If Capo and Lee plan to pull this off, Ciccolo said, it will require significant investment in educating regulators on an ongoing basis and constant communication with larger banks.

Acknowledging the challenges, Capo said the first and most costly step of converting WEG into a crypto-savvy bank will be restructuring all of its KYC and AML processes to create a new crypto-centric model.
“We’re being conservative because we want to build this bank so it will be around for a long time,” he told CoinDesk, concluding:
“The infrastructure is there, we just might have to potentially modify it for crypto-based services.”


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Leigh Cuen
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