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Mimblewimble threatens to get Litecoin delisted

27 May, 2022
MimbleWimbl

Once among the Top 5 cryptocurrencies, Litecoin now finds itself in 18th place with a capitalisation of $4.9 billion. But now, this position is also under threat after an update from Mimblewimble highlighted the risk of Litecoin being delisted from several major South Korean exchanges.

Image source: StormGain cryptocurrency exchange

The latest Mimblewimble (MVEB) update enables users to make confidential transactions by combining multiple transactions in one log entry. The blocks also undergo verification, but the record of previous transfers now appears as a selection of random symbols. The fact that prior history is no longer included in the record means that the network's productivity is now higher.

MVEB was launched on Litecoin's blockchain last week. Then, on 23 May, leading South Korean exchanges Bithumb and Upbit to issue a warning to investors about the risks connected with this update. For starters, any payments made with MVEB cannot be refunded under any circumstances. Meanwhile, there is a real possibility of Litecoin being delisted since confidential transactions hinder KYC (Know Your Client) and AML (Anti-money laundering) policies.

Image source: cafe.bithumb.com

Back in 2019, South Korean exchanges delisted anonymous coins en masse under pressure from regulators, leading to average losses of around 25% in the space of a month. Now they have Litecoin in their sights. The coin could correct to $53 if it suffers the same fate.

What's more, MVEB has less protection and a lower level of confidentiality than Monero and Zcash. With the development of quantum computing, its current protection algorithm will no longer be relevant. However, it's unlikely these arguments will stop South Korean exchanges from tightening the screws.

The problem is exacerbated by the recent collapse of Terra (LUNA). Representatives of South Korea's major crypto exchanges were called before the country's parliament to explain the circumstances surrounding huge investor losses, while the Seoul police department sent them a request to freeze the assets of Luna Foundation Guard to prevent any further withdrawals of funds by potential fraudsters. The negative news climate can only increase the likelihood of Litecoin being delisted soon.

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