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Some of the largest cryptocurrency exchanges in South Korea have announced that they have delisted Litecoin (LTC). The delisting comes in the light of a new privacy feature introduced to the network.
South Korea is one of the largest crypto hubs globally. However, the jurisdiction also has some of the toughest crypto laws, and exchanges are required to promote transparency in crypto transactions. The new Litecoin upgrade implemented transaction anonymity, which has challenged how these exchanges would comply by having anonymous Litecoin transactions.
South Korean exchanges delist Litecoin
Upbit released a public statement on Wednesday saying that supporting Litecoin would affect the exchange's compliance status. Upbit referred to the Act on the Reporting and Use of Specific Financial Transaction Information that prevents anonymous transactions.
The delisting of Litecoin comes amid the much-awaited MWEB upgrade. This upgrade transformed the Litecoin network into a private one. It also hid some key identifiers of transactions conducted through the network. The MWEB upgrade was announced earlier this year, but it had been proposed nearly two years back.
The Upbit exchange noted that it reached out to the Litecoin Foundation to understand the upgrade that would bestow privacy upon the transactions made on the network. After conducting a thorough review of the upgrade and how it would affect the operations of the Litecoin network, Upbit decided to delist LTC.
The users on this exchange have been given one month to withdraw LTC from the platform. Upbit said that the upgrade had prevented transaction exposure, which prevented the exchange from complying with the set rules by continuing to offer the token to users.
“We decided to terminate the transaction support for Litecoin (LTC), a sit was determined that the optional function that does not expose transaction information included in this network upgrade corresponds to an anonymous transmission technology under the Specific Financial Information Act,” the exchange said.
Upbit is not the only South Korean exchange that has delisted Litecoin following the MWEB upgrade. A report by 8BTC said that five of the largest cryptocurrency exchanges in South Korea, namely Bithumb, Coinone, Gopax, Korbit, and Upbit, had delisted LTC.
The delisting of the token by leading cryptocurrency exchanges was expected. Upbit and some of the other leading exchanges had warned investors about the end of May, advising them of the regulatory risks linked to private transactions.
As aforementioned, South Korea has some of the most strict cryptocurrency regulations globally. The Specific Financial Information Act is one of these regulations. This rule requires that cryptocurrency exchanges implement strict Know Your Customer (KYC) and Anti-Money Laundering practices. The regulation prohibits transaction anonymity.
Delisting Litecoin was a highly anticipated event because several exchanges issued their warnings at the beginning of the year. Korean cryptocurrency exchanges have delisted LTC and many other privacy tokens.
Litecoin's MWEB upgrade
Litecoin has been working on the MimbleWimble protocol for around two years. Once this protocol is launched, it will boost the network's fungibility and promote the network's scalability.
The MWEB upgrade was eagerly awaited by the Litecoin community, and it was one of the most significant upgrades since the network was launched ten years ago. Mimblewimble is a decentralized protocol that is focused on privacy. It adopts a comprehensive way of creating and storing transactions within the blockchain.
The upgrade comes with features that are not present with other cryptocurrencies. In transparency blockchain, the sender's address, the receiver's address, and the amount of cryptocurrency being sent. The Mimblewimble protocol does not reveal any of these details because it makes transactions confidential.
To learn more visit our Investing in Litecoin guide.
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Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.