Five South Korean cryptocurrency exchanges recently said they would remove Litecoin from the list because the crypto asset’s Mimblewimble Extension Blocks (MWEB) upgrade violated the country’s laws. As a result, exchange users cannot use Korean Won to trade the crypto asset, which has since been dubbed the “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 report from News1, the anonymity caused by the Mimblewimble upgrade violates a provision of the Specific Financial Reporting Act which states that cryptocurrency exchanges cannot handle cryptocurrencies that hide records of transfer.
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 indicated that the “long-awaited” MWEB upgrade had been activated. The statement explained that the upgrade “is a fungibility-enhancing technology that enhances privacy between senders and receivers of a transaction.” The amount sent is only known between the sender and the recipient, the statement added.
However, following this upgrade which saw LTC being labeled as 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.
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