Why did Charlie Lee sell all of his Litecoin?

11 Dec, 2018 | Updated: 11 Dec, 2018
by Joeri Cant
News
Why did Charlie Lee sell all of his Litecoin?

Even though Litecoin founder Charlie Lee is widely seen as one of the most significant contributors to the development of the cryptocurrency space, his decision to sell all of his Litecoin holdings in December 2017 remains one of his most controversial moves to date.

Charlie Lee shared his decision in a post on Reddit, where he clarified that he decided to sell almost all of his holdings in Litecoin, the cryptocurrency that he founded in 2011, to avoid the conflict of interest that came with his influence on the cryptocurrency universe and from his position as Litecoin founder.

Read more: Who is Charlie Lee?

Charlie Lee, who currently has almost 800K Twitter followers, said in the Reddit post that sometimes people accuse him of talking about the price of the digital currency on Twitter for personal benefit.

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

The MIT Computer Science grad, who never disclosed the exact amount of the sold tokens, pointed out that by selling his crypto currency holding, he was able to focus more on developing the cryptocurrency itself.

'This is definitely a weird feeling, but also somehow refreshing. Don’t worry. I’m not quitting Litecoin. 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', Lee said.

A few months into 2018, however, Charlie Lee, hinted in an interview, that he wasn't sure any longer if selling all of his Litecoin holdings was indeed the right decision.

'I think in the long run it was the right move but in the short term while the price is down, below the all-time high, it just feels like it’s not the right decision.', Lee said, adding that a few years down the road, when the price hits all-time highs again, it will feel like it was the right move.

Read more: Litecoin has tremendous value": Charlie Lee goes on the defensive 

A week before Charlie Lee sold all of his Litecoin holdings, he warned investors about a possible multi-year bear market, where Litecoin could drop 90% in value and not to buy Litecoin if they couldn't handle a drop to $20.

This 'Nostradamus' moment led many investors to suspect Charlie Lee of insider trading, pointing out that only once Litecoin surged 9,150% in value, Lee raised concerns about conflicts of interest.

Many grew suspicious, with suggestions that Lee was cashing out at the top with no regard for the future of Litecoin.

When Charlie Lee sold his Litecoin, one coin was trading at $330, which was not too far away from its all-time-high. A year later in December 2018, Litecoin was being sold at the much lower price of $25.42, which represents a 13x discount.

Charlie Lee, however, always maintained that the only reason he was selling off his Litecoin was to avoid this kind of conflict of interest, as he felt that he had too much potential influence on the value of the Litecoin token.

Despite this, accusations of insider trading continue to be a stain on Lee's otherwise impeccable reputation in the crypto community.

Read more: Litecoin founder Charlie Lee defends himself regarding "bad journalism"

In August 2018, when Lee was asked the question if he ever would buy back his Litecoin collection, he made it clear that he isn't planning on doing so 'any time soon or at all'.

Read more: Today Charlie Lee can buy his LTC stash back 10 times cheaper

As a veteran in the cryptocurrency space, Lee remains one of its most respected and trusted voices. Once crypto realises its full potential, Charlie Lee will most likely be considered as one of the figures that 'made crypto happen'.

Read more: Litecoin is celebrating its 7th birthday today!

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