Litecoin will be delisted on Bithumb and Upbit, two South Korean Crypto exchanges, over modifications made to the coin that enable greater privacy when conducting transactions.
In their notices regarding Litecoin, Bithumb and Upbit stated they were shutting down market support for the 20th-largest cryptocurrency by market capitalization because its newly activated Mimblewimble Extension Blocks (MWEB) network upgrade conflicts with South Korean anti-money laundering (AML) regulation.
Upbit pointed to an option in trading Litecoin that “enables users to not expose transaction information,” raising concerns that “anonymous transmission technology” will likely be added to the coin’s functionality.
Market support for Litecoin using Upbit will be shutting down on June 20 and users will be given a month after that to withdraw their funds from the exchange by July 20.
Bithumb is taking quicker action. In its delisting notice, the exchange emphasized its responsibility to “protect [its] users and to construct a transparent digital asset market.” It will prevent users from depositing Litecoin on June 8 and give them until July 25 to fully withdraw their Litecoin from the exchange.
In the U.S., Litecoin is available on most major cryptocurrency exchanges, including Coinbase, FTX US, and Binance US. It was also one of the first cryptocurrencies to be made available for purchase through Robinhood back in 2018, but the moves by South Korean exchanges could cast the coin’s future into doubt.
Coinbase, Robinhood, Binance US, Kraken, Gemini, FTX US, Crypto.com all currently offer the exchange of Litecoin on their platforms and did not immediately respond to requests for comment.
Exchanges have in the past treaded lightly around so-called privacy coins that employ advanced privacy techniques and enable transactors to preserve their anonymity. The most widely used privacy coins are Zcash and Monero, which have a total market value of nearly $4.7 billion when combined.
The anonymous nature of transactions using this breed of cryptocurrency lend utility in illicit activities and serve as a potentially valuable tool for scammers and hackers to launder their funds. A recent Reuters investigation claimed Binance served as a “conduit” to launder $2.35 billion in funds and that Monero was critical to the success of nefarious actors trying to clean their ill-gotten crypto using the exchange.
Binance called the investigation “woefully misinformed” and suggested that it was based on “outdated information from 2019 and unverified personal attestations as a crutch to establish a false narrative,” in a statement shared with Decrypt.
Litecoin is one of the oldest and most well-established cryptocurrencies; at one point, it was the top-three coin by market capitalization in 2017. While it’s still available on virtually all crypto exchanges in the U.S., that could very well change in the future if companies take similar actions to Bithumb and Upbit.
Leave a Reply