Five South Korean cryptocurrency exchanges recently said they will delist litecoin because the crypto asset’s Mimblewimble Extension Blocks (MWEB) upgrade violates the country’s laws. As a result, the exchanges’ users cannot use the Korean won to trade the crypto asset, which has since been named a “dark coin.”
The upgrade violates the law on specific financial information
Following the recent upgrade of Mimblewimble (MWEB) extension blocks to litecoin, five of South Korea’s leading cryptocurrency exchanges, namely Upbit, Bithumb, Coinone, Korbit, and Gopax, responded by announcing that would remove the crypto asset from the list. The exchanges claim that the upgrade made Litecoin transactions anonymous, which is against the country’s laws.
According to a News1 report, the anonymity that was brought about by the Mimblewimble upgrade violates a provision in the Specific Financial Information Act which stipulates that cryptocurrency exchanges cannot handle crypto coins that hide transfer records.
In a statement, Upbit reportedly said:
According to the special law, exchanges must check whether transmission records can be verified for digital assets with anonymous transmission technology and take appropriate action if anonymous transmission technology is found.
In May, a statement from the Litecoin team said the “highly anticipated” MWEB upgrade had been activated. The statement explained that the upgrade “is a fungibility-improving technology that enhances confidentiality between the senders and receivers in a transaction.” The amount being sent is only known between the sender and receiver, the statement added.
However, following this upgrade which saw LTC being labeled a dark coin, users in South Korea cannot trade the crypto asset using the currency earned on these exchanges. Nonetheless, News1’s report says exchanges have decided to continue supporting LTC withdrawals for at least a month.
