The creator of Litecoin, Charlie Lee and Derek Capo’s most heated arguments in social media back in April has gained all the attention of many. Later, these very arguments ended up on a good note and connected them well when they realized that both struggled due to the similar issue.
Crypto exchanges need the service of banks desperately to meet and manage the financial aspect of the business; however, both don’t go hand-in-hand due to many regulations which are not fine-tuned to cope up with the newly evolved blockchain and crypto exchanges requirements. This problem was rightly identified by the creator of Litecoin Charlie Lee and CEO of TokenPay Derek Capo.
In the words of Capo: “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”.
To solve this fundamental problem, the creator of Litecoin Charlie Lee decided to buy 9.9% of WEG Bank AG, which is a German-based financial institution. 9.9% is the maximum limit allowed to acquire in Germany. TokenPay also acquired 9.9% of WEG. Charlie announced this news about acquisition through his twitter account.
Charlie Lee and Derek Capo are of the opinion that if everything goes according to the plan, the ongoing financial activities can be executed with WEG with great trust.
Issues and Challenges
I'm excited to announce that @LTCFoundation and @TokenPay have entered into a strategic partnership to buy a stake in a German bank, WEG Bank AG. We plan to work on many exciting consumer-driven crypto solutions. Stay tuned! 🚀
— Charlie Lee [LTC⚡] (@SatoshiLite) July 10, 2018
Many financial experts are of the opinion that even though they acquire their own bank, they are likely to face various other problems.
According to Capo, he is of the opinion that they should issue a crypto credit card which allows easy conversion of crypto to euros. He hopes that this service can be implemented within 9 months post approval of the acquisition. They have plans to integrate the banking services with TokenPay’s DEX.
Charlie Lee and Capo will also be faced with the problem of liquidity in the future, even after the acquisition of their own bank. WEG is a bank which operates in a small town in Germany with a population of about 21000. A former Barclays banker, Simon Taylor commented on the acquisition of WEG in the following words:
“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, 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.”
Anyhow, let’s wait and see how Lee and Capo are going to deal in the days to come. Keep reading!