South Korea's UPbit, Bithumb issue investment warnings against Litecoin

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South Korea's UPbit, Bithumb issue investment warnings against Litecoin

Two of South Korea's largest criptocurrency exchanges, UPbit and Bithumb, issued investment warnings against Litecoin LTC on May 23, citing the altcoin's privacy upgrade.

The exchanges are considering delisting the altcoin in light of the legal challenges posed by the upgrade.

Litecoin s Mimblewimble Extension Blocks MWEB upgrade was first introduced in November 2019 and went live last week. It enhances the confidentiality of transactions and allows users to send transactions to the extension block and back to the main chain, obscuring the amount sent and the wallet addresses.

While Litecoin investors welcomed the heightened privacy, it makes tracking transactions difficult, which is against South Korea's financial laws. The Act on the Reporting and Use of Specific Financial Transaction Information requires virtual asset service providers to add know-your-customer KYC systems and measures against money laundering.

The UPbit wrote in an announcement that we are striving to prevent money laundering and terrorism financing through digital assets that have technology that makes transaction records unidentifiable. Bithumb issued a similar statement.

UPbit said any deposits made via MWEB will lead to a permanent loss of funds, since UPbit can't verify the addresses or transaction amounts.

Korean exchanges have been delisting token after similar warnings. Bithumb and Upbit account for most of South Korea's criptocurrency trading volume. There aren't any statements from Coinone and Korbit, two other leading exchanges in the country.

Litecoin was created from a Bitcoin fork in 2011 and is one of the earliest competitors of the largest coin. It is currently the eighteenth largest criptocurrency, with a market cap of $5.13 billion.