Once one of the top five blockchains, Litecoin has faced new challenges and pressure from South Korea's cryptocurrency exchanges. In mid-May, MimbleWimble (MVEB) was updated, increasing the anonymity of transactions. For crypto exchanges, this caused legal difficulties for financial transactions.

MVEB has multiple goals, and by combining many transactions together, the record becomes similar to a set of random numbers. In this case, the previous history is included in a truncated form, which increases the processing speed. In terms of protection and privacy, MVEB is not a match for Monero or Zcash. However, this move was enough for the largest crypto exchanges in South Korea to announce the end of support for Litecoin.

The use of MVEB makes it difficult for financial operators to carry out KYC (customer identification) and AML (anti-money laundering) measures, as well as a number of other policies required by local law. Upbit, Bithumb, Gopax, Korbit and Coinone have already announced the upcoming delisting and end of support for Litecoin. So, Bithumb will stop supporting transactions with the coin on 22 June and transfers from 22 July.

Image source: cafe.bithumb.com

Crypto regulations in South Korea are some of the strictest in the world. In 2019, under pressure from Korean regulations, crypto exchanges delisted anonymous coins, which led them to drop by an average of 25% over the course of the month. 

Litecoin is already trading 85% below its all-time high reached in May 2021. The upcoming delisting will probably lead to a further fall for the cryptocurrency and its exit from the Top 20 rating by market capitalisation.

StormGain Analysis Group

(cryptocurrency trading, exchange and storage platform)