On Tuesday (10 July 2018), Litecoin Foundation (LTC) announced that it had acquired blockchain startup TokenPay‘s original 9.9% stake in Germany’s WEG Bank in exchange for helping TokenPay with marketing and technology.
On 9 May 2018, TokenPay announced that it had closed a deal with WEG Bank. What TokenPay did on that occasion was to use the proceeds of its December 2017 token (TPAY) sale to acquire 9.9% of the equity interest in WEG Bank “with options to acquire an additional 80.1% of the bank upon customary regulatory approval.”
What happened today, according to the joint press release by TokenPay and Litecoin Foundation, was that TokenPay transferred its 9.9% stake in WEB Bank to Litecoin Foundation “in exchange for a broad and comprehensive marketing and technology service agreement to benefit TokenPay” and its various blockchain-related initiatives (including but not limited to the TPAY Cryptocurrency, the eFin Decentralized Exchange and the EFIN coin, TokenSuisse Asset Management and structured financial products, the WEG Bank FinTech Platform including consumer debit cards, and the TokenPay Multisignature Transaction Engine).
Furthermore, TokenPay decided to acquire an additional 9.9% of WEG Bank. It was not able to buy more WEG Bank shares at this time because under German banking law no entity can own more than 9.9% of a bank without regulatory approval. So, now, TokenPay needs to wait for approval from Germany’s Federal Financial Supervisory Authority (BaFin) before it can acquire an additional 70.2% in WEG Bank (that it is entitled to under its May 2018 agreement with WEG Bank).
Now that TokenPay has strategic partnerships with both Verge (XVG) and Litecoin (LTC), it will have even more potential customers for the crypto debit cards it plans to introduce in the near future.
Charlie Lee, the creator of Litecoin and the Managing Director of the Litecoin Foundation, declared:
“This partnership is a huge win-win for both Litecoin and TokenPay. I’m looking forward to integrating Litecoin with the WEG Bank AG and all the various services it has to offer, to make it simple for anyone to buy and use Litecoin. I’m also excited about Litecoin’s support in TokenPay’s eFin decentralized exchange.”
This is how Lee announced the news on Twitter:
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! 🚀
For more info: https://t.co/K58SpQKvEl pic.twitter.com/6agmsa7wkb
— Charlie Lee [LTC⚡] (@SatoshiLite) July 10, 2018
The founder and CEO of WEG Bank AG, Matthias von Hauff, stated:
“The partnership with innovative institutions such as TokenPay and Litecoin might at first come unexpectedly for a very conservative institution like us. But we have thoroughly and diligently examined the prospects of a common future, and we became convinced that the future of banking will make adoption of such modern payment methods inevitable. We are therefore proud to have teamed up with the best in the field.”
By now, you must be wondering ‘How did Litecoin Foundation suddenly become interested in owning 9.9% of a German bank?’. It sounds a bit crazy, right? Well, what is even more crazy is that the reason that Litecoin Foundation and TokenPay started talking together in the first place is Verge’s “partnership” deal with Mindgeek (better known as the owner of adult entertainment site Pornhub) which was announced on 17 April 2018; that deal only happened with the financial help of TokenPay, which at the time had an informal strategic partnership with the Verge (XVG) team. In fact, several days earlier, the CEO of Token Pay, Derek Capo, had sent out this tweet:
#TokenPay CEO @derekcapo meeting in Munich earlier today for breakfast with key stakeholders of the German bank. A deal in principle has been agreed upon by all parties. We will provide full details at closing, but can say that $TPAY and $XVG debit cards are likely coming soon. pic.twitter.com/Xmos479vrC
— TokenPay (@tokenpay) April 8, 2018
At first, Charlie Lee made fun of the Verge’s announcement of Verge’s partnership deal with Mindgeek:
Turns out Verge's super expensive partnership was PornHub. “we think it has gained enough steam for us to penetrate the market.” penetrate. 😂@Pornhub, enough with the foreplay. Time to accept the real cryptocurrencies like BTC, LTC, and XMR. 🚀
https://t.co/9IboL6LnNn— Charlie Lee [LTC⚡] (@SatoshiLite) April 17, 2018
Then, Capo explained why TokenPay had decided to help Verge:
1. If @tokenpay did not donate the deal does not happen. 2. @tokenpay has a partnership with @vergecurrency for our banking solution (we are buying bank in Germany). 3. More partnerships between crypto is important. TokenPay also benefits in helping large community, etc.
— Derek Capo (@derekcapo) April 17, 2018
Capo then went on to casually invite Lee to also become a strategic partner of TokenPay:
No problem, so when do you want to talk about a REAL debit card solution? We are buying 9.9% of a bank in Munich with option to buy 90%. We have a whole ecosystem and plan in place. Let me know how we can work together. The battle between old and new world is just getting started
— Derek Capo (@derekcapo) April 17, 2018
Next, Capo explained to Lee how such a partnership deal could help Litecoin:
They key to making this all work is ecosystems, partnerships and constant communication with regulators. Buying a bank in Germany gets us a seat at regulator table, key to educating goverments. As for $LTC we can add to our bank, debit card, gift cards etc.
— Derek Capo (@derekcapo) April 17, 2018
Lee replied:
Thanks. Let me know if there's anything I or the Litecoin Foundation can do to help. Dm me.
— Charlie Lee [LTC⚡] (@SatoshiLite) April 17, 2018
According to a report in Forbes, Mati Greenspan, a senior market analyst at social trading platform eToro, called this partnership with TokenPay “a bold move from the Litecoin Foundation and groundbreaking for the crypto-industry” before going on to say that that the “best way to improve financial services is to integrate with them and Germany is the perfect place to begin.”
Featured Image Credit: Photo by “BTC Keychain” via Flickr; licensed under “CC BY 2.0”
