UPbit and Bithumb, two of South Korea's leading cryptocurrency exchanges, issued investment warnings against Litecoin (LTC) on May 23, citing the altcoin's privacy improvement.
In view of probable legal issues faced by the update, both exchanges are considering delisting the altcoin.
The Mimblewimble Extension Blocks (MWEB) upgrade for Litecoin was first announced in November 2019 and launched last week. It improves transaction confidentiality by allowing users to transfer transactions to the extension block and then back to the main chain while hiding the amount sent and wallet addresses.
The MWEB Litecoin update makes the cryptocurrency more private and places a greater emphasis on on-chain security. While most bitcoin investors are pleased with the shift, centralized and regulated cryptocurrency exchanges in countries such as South Korea may begin the delisting process due to legal concerns.
While the increased secrecy was appreciated by Litecoin investors, it makes it difficult to track transactions, which is against South Korean financial laws. Virtual asset service providers must implement know-your-customer (KYC) systems and anti-money laundering procedures under the Act on the Reporting and Use of Specific Financial Transaction Information.
The key benefit of the new version, which will go live on block 2257920, is increased transaction confidentiality between senders and receivers. Mimblewimble Extension Blocks allow users to transmit coins from the main chain to the extension block and back.
In a release, UPbit stated, "We are attempting to combat money laundering and terrorism financing with digital assets that include technology that renders transaction records untraceable." Bithumb also published a statement.
Because UPbit cannot validate the addresses or transaction amounts, any deposits made via MWEB will result in a permanent loss of cash, according to UPbit.
Simply said, MWED enables the sending of "secret" transactions on a chain while concealing the amount transferred. In essence, it makes it impossible for authorities in nations like South Korea to monitor a sent cash and makes it non-taxable. Updates also boost the network's throughput and transaction processing speed, according to the developers.
According to Upbit's release, the exchange is always striving to prevent money laundering, which is why if they see deposits to the exchange via Mimblewimble, they will have no choice but to delist Litecoin.
Monero coin, which is similarly heavily restricted in European and Asian legislatures and outlawed by the majority of centralized cryptocurrency exchanges, has functions comparable to anonymous transactions.
Following similar warning messages in the past, Korean exchanges have delisted tokens. Bithumb and Upbit account for the majority of cryptocurrency trading volume in South Korea. Coinone and Korbit, the country's two other major exchanges, have yet to comment.
While Litecoin's future on large CEXs is uncertain, decentralized exchanges are welcoming new features that make Litecoin trading safer and more decentralized.
Litecoin, which began as a Bitcoin split in 2011, was one of the first cryptocurrency competitors. With a market cap of $5.13 billion, it is now the eighth largest cryptocurrency.
Deposits made using the new technology, according to the exchange, will result in a permanent loss of cash because the exchange will not be able to authenticate the transaction amount or the sender.
Litecoin's MimbleWimble Upgrade Officially Activates
The long-awaited MimbleWimble upgrade has been officially launched, according to the official Twitter handle of the Litecoin cryptocurrency. This allows for privacy-oriented transactions on the network.
MimbleWimble was integrated into Litecoin using the MimbleWimble Extension Block, or MWEB, which allows users to opt-in to secret transactions. To hide the source and receiver of a transaction, MimbleWimble uses a variety of cryptographic algorithms.
According to lead developer David Burkett, the MWEB increases Litecoin's viability as a fungible currency that may be used for everyday transactions, paying employee salaries, and even buying real estate.
In February 2022, Litecoin developers declared the readiness of MWEB, and in March, they published a new version of the Litecoin Core 0.21.2 client to the testnet, which includes MWEB upgrades and Taproot.
Despite this, the price of Litecoin appears to be stabilizing above the $52 support level after a continuous decline since March. If LTC can break through the MA 50 obstacle at $98.76, it might see a 30% increase from current levels. The aforementioned barrier might set off a quick rise toward $134. Litecoin's price is still 82.85% lower than its all-time high of $412.