Damned if you do damned if you don’t. That is basically the feeling Charlie Lee expressed in his most recent post on the Litecoin Reddit thread when he announced to the world that he had sold all his Litecoin holdings. Satoshi Lite went in the opposite direction of the mysterious Bitcoin founder, and instead of holding all his coins still, on an address everyone knows is his, he sold his coins to signal to the market that he has no interest in benefitting from any kind of inside information he might have on the development of this digital asset. Nevertheless, the timing of this decision as well as the decision itself apparently drew more criticism from members of the community.
Conflict of Interest
Charlie has been criticized in the past and has been accused of profiting from his position as an insider. According to the post on Reddit – and numerous replies to his tweets in the past – people think that he has shorted Litecoin or has engaged in pump and dumps related to his tweets about the price and the development milestones of the coin. There is no solid evidence to substantiate these claims, but Charlie decided that holding Litecoin and being perceived as a possible market manipulator constituted a conflict of interest nonetheless.
No matter how harsh some people might have been with their responses on Twitter, Charlie Lee had other alternatives to deal with the perceived conflict of interest:
- He could have held his coins frozen on an address known to all with a self-imposed time limit on transactions. The draw-back would have been showing the world how much he owned. Not something everyone is willing to do for several reasons.
- Charlie could have sold his holdings once he announced he was going to dedicate 100% of his time to the development of Litecoin.
- Another way to get rid of the perceived conflict of interest, would have been through the establishment of a charitable foundation of some sort and the subsequent donation of his holdings, to be managed independently.
Charlie Sold Near the Peak of the Market
But instead, it turns out that Charlie Lee sold his coins near the peak of the market, which makes his move more suspicious in the eyes of those critics. That is why he added that last sentence on the Reddit announcement, telling people he sold before the “Bcash – Bitcoin Cash – on GDAX/Coinbase fiasco.” That should help prove that accusations against him are unsubstantiated, but it didn’t.
Between a Rock and a Hard Place
Individuals in any case, should be presumed innocent; the burden of proof is on the accuser always. Charlie Lee put himself between a rock and a hard place when he decided to sell now. However, there is no proof that he indeed manipulated the market before or that he did so right now. Cryptocurrency as an unregulated, truly free market, affords its participants choices that other markets don’t. Those choices come with the responsibility of verifying what is going on. Litecoin holders should know who Charlie Lee is and how the asset they hold has developed. If they had no problem buying it, mining it, holding it and transacting with it until now, Charlie’s decision to sell shouldn’t affect them. On the other hand, if that is the case, and this year’s price rally shows that people are more than willing to accept Litecoin development as is, then, why should Charlie Lee sell his assets at all? Critics would have criticized his decision in any case, so probably Satoshi Lite will always be damned if he did or damned if he didn’t.