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South Korea’s Upbit and Bithumb warn over Litecoin privacy feature

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Litecoin implemented the MimbleWimble Extension Blocks (MWEB) recently to boost privacy within the network. The privacy-focused upgrade could be good news for developers and users of the Litecoin network, but it has spooked two of the leading exchanges in South Korea.

Upbit and Bithumb spooked after Litecoin’s MWEB integration

Bithumb and Upbit, two of the leading exchanges in South Korea, have issued a warning about Litecoin, one of the most popular cryptos. The two exchanges carry the majority of trading volumes in South Korea, and they have advised investors of the risks affiliated with the recently integrated privacy feature on Litecoin.

The MimbleWimble upgrade allows users within the network to make “confidential transactions allowing them to send tokens while hiding the transaction data according to a report from Bithumb. Upbit’s statement also says that the feature encrypts transaction data.

The two cryptocurrency exchanges further talked about Korea’s Act on the Reporting and Use of Specific Financial Transaction Information. This law mandates exchanges operating in South Korea to adopt Know Your Customer (KYC) and Anti-Money Laundering (AML) systems when people buy Litecoin and other cryptocurrencies.

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The regulatory framework in South Korea is very strict. In the past, these exchanges have delisted cryptocurrencies after making these warnings. Other popular exchanges in the country, such as Coinone and Korbit, have not shared a similar statement.

Litecoin integrates MimbleWimble upgrade

Litecoin implemented the MimbleWimble upgrade. However, the upgrade was proposed two and a half years ago. The upgrade was released earlier this year after a vote by nodes approved the update and allowed network users to enjoy privacy features. MWEB upgrade was rolled on Litecoin at a block height of 2 million.

MimbleWimble has been the most sought after upgrade within the Litecoin network. The developers believe that the upgrade could bring major benefits to the network. Besides boosting privacy, it will also integrate key performance improvements for the blockchain, which could see it record higher adoption.

MimbleWimble compresses transaction data from the blocks and promotes discreet transactions via the Litecoin blockchain. While some users could be looking for this level of privacy, the upgrade could cause major regulatory concerns, given that regulatory frameworks in different jurisdictions now require people to comply with AML and KYC features.

Litecoin is one of the oldest networks in the market. The network was launched in 2011, and it was one of the top competitors of Bitcoin. Litecoin is mainly used for transactional purposes, and it is the best crypto to invest in for those looking for a token with utility as a payment method.

Litecoin is also seen as a testing net for Bitcoin, as seen with the SegWit upgrade. Some cryptocurrency community members have speculated that the MimbleWimble upgrade could be rolled into Bitcoin if it is a success on Litecoin.

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