Litecoin's privacy protocol MWEB upgrade completed, Korean exchanges issue consecutive warnings

Given that Litecoin (LTC) has successfully integrated the privacy protocol MimbleWimble (MWEB) to enhance its privacy and has been activated at block height 2265984, South Korean exchanges that had previously delisted privacy coins have issued related warnings.

MimbleWimble (MWEB)

The Litecoin Foundation first introduced the Litecoin Improvement Proposals (LIPs) LIP-0002 and LIP-0003 in October 2019, aiming to integrate the MimbleWimble protocol into the Litecoin network to establish privacy features.

After three years, the MWEB upgrade was officially activated on 5/20 at Litecoin block height 2265984 through a soft fork. Founder Charlie Lee tweeted:

"In terms of fungibility and privacy, I believe MWEB can give you 90% privacy, which should be good enough for most people. It's the difference between living in a glass house versus a house with just one window."

In terms of fungibility and privacy, I believe MWEB gets you 90% there. For most people that's good enough. It's the difference between living in a glass house vs living in a house with windows. For people who need 100% privacy, they can live in a house with no windows. https://t.co/3J6Els4SIX

— Charlie Lee Ⓜ️🕸️ (@SatoshiLite) May 22, 2022

In summary, MWEB can provide users with transaction options that do not disclose the amount transferred or the balance of addresses. Users can still choose to conduct regular transactions on the main chain or switch to MWEB for privacy transaction features.

As for exchanges, they can choose whether to integrate with their platform wallets.

Bithumb and Upbit Warnings

Following the Litecoin MWEB upgrade, two of South Korea's major cryptocurrency exchanges, Bithumb and Upbit, issued investment warnings.

Bithumb stated that the MWEB upgrade brings the ability for privacy transactions on the Litecoin blockchain, allowing users to send tokens in a confidential manner.

Both exchanges mentioned the South Korean "Special Financial Transactions Information Act," under which exchanges are required to implement KYC and anti-money laundering policies as requested by regulators. South Korean exchanges often delist tokens after issuing such warnings.

For some reason, South Korean regulatory authorities are more active in cracking down on privacy coins compared to regulators in other countries. In September 2019, the cryptocurrency exchange OKEx Korea abruptly announced the delisting of five privacy coins: ZEC, XMR, DASH, ZEN, and SBTC. Upbit also announced the delisting of three privacy coins in the same month.

6/9 Update: Delisting by Major Exchanges

On 6/8, South Korea's major exchanges Upbit, Bithumb, Coinone, Korbit, and Gopax announced the termination of LTC trading support. The trading cutoff date is around mid-June, with withdrawal deadlines varying among the exchanges, mostly in mid-July, and the latest being Korbit's 8/31.