South Korean cryptocurrency exchanges Bithumb and Upbit seem to be on alarm as the Litecoin blockchain recently got a major improvement that enhances the confidential side of on-chain transactions.
Bithumb said in a recent blog post that litecoin (LTC) from now on is considered as “investment warning assets,” while Upbit warned it will conduct a “detailed review of the relevant digital asset to determine whether to extend, release, or terminate the final transaction support.”
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Bithumb says Litecoin’s latest update called Mimblewimble includes not only enhancements to the scalability of the network, but also fundamental changes to how transactions can now work. The exchange said:
“In order to protect our users and investors, ‘To delist digital assets that are against the regulations or guidelines provided by the government and financial regulatory authorities’ is also included in Bithumb’s listing policy.”
Mimblewimble is a protocol upgrade, which was first deployed on the Grin network back in January 2019, that enhances privacy cryptographic features. With the upgrade, users can now users conceal transaction data on the Litecoin blockchain.
For Bithumb and Upbit such an upgrade is a headache as Korean cryptocurrency trading platforms have to comply with strict regulatory rules. For instance, Bithumb now bans users from withdrawing crypto assets to unverified third-party wallets. However, the ban does not apply to withdrawals to local or foreign centralized exchanges that implement strict KYC procedures. To register their addresses, customers must complete additional verification.
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