South Korean Exchanges Drop Litecoin Over Mimblewimble Upgrade
The eventual launch of the Mimblewimble Extension Block (MWEB) may have been a milestone for the Litecoin network but it is costing the ecosystem some support as five Korean exchanges drop the cryptocurrency from their listings.
The South Korean exchanges – Bithumb, Coinone, Korbit, Gopax, and the one with the largest amount of user deposits, Upbit – said they would delist Litecoin all at once for the MWEB upgrade which enables a privacy feature that gives Litecoin users the option to send confidential transactions and conceal the participant’s identity and amounts involved. They say the inability to expose transaction information, as brought about by the upgrade, is tantamount to an anonymous transmission technology under the Specific Financial Information Act which requires them to provide verifiable records of transactions. The decisions by the five exchanges means the channel to trade Litecoin in Korean Won is blocked and other exchanges like Poblegate and Kordax are expected to follow suit.
MWEB was first introduced in November 2019 as a Litecoin Improvement Proposal but only went live on May 19, 2022 after going through a gradual development phase. As most blockchains are openly analyzable today, Litecoin pushed its upgrade as a fungibility-improving technology that provides its users with “the option to not have to publicly display the amount you’re sending or how much Litecoin you hold in an MWEB address. One has the choice of continuing to make standard transactions on the main chain or move over to MWEB to gain the advantage of its added confidentiality features. By being an opt-in feature, exchanges and wallets have the option of integrating it and would be highly recommended, but not obliged to do so.”
At last, the highly anticipated #MWEB upgrade has officially activated on the Litecoin network!
— Litecoin Foundation ⚡️ (@LTCFoundation) May 20, 2022
Due to its close proximity with Bitcoin, the MWEB activation is considered to place Litecoin in a unique position to now be “the most widely accessible cryptocurrency with improved fungibility and confidentiality features” and the “the easiest cryptocurrency to obtain for one simply not wanting to broadcast to the world how much money they’re sending.”
As indicated by the exchanges, not all crypto-related businesses are thrilled by the upgrade. Upbit says it will end all transaction support for Litecoin on June 20 as the MWEB upgrade violates its digital asset transaction support termination policy which is against the non-exposure of transaction information as now included in the network. It’s the same with Bithumb though it adds that it “is possible to cancel the designation as an investment warning item” if the reason for designating Litecoin for termination is resolved before it takes effect.
Meanwhile, one of the blockchain-based projects that have announced support for the MWEB privacy feature is the analytics firm for crypto asset compliance, Elliptic. The firm says the upgrade will enable it to provide regulated businesses with the risk insights to continue to support Litecoin transactions while remaining compliant with anti-money laundering regulations and sanctions.