Bithumb and Upbit warned investors about the risks associated with the privacy-enhancing development in statements released Monday, May 23, following the Litecoin blockchain's latest privacy-focused MimbleWimble development. Litecoin first announced its privacy-focused Mimblewimble development in 2020.

Bithumb said in a statement that the Mimblewimble development allows users to make “secret transactions” that allow them to send tokens while hiding transaction data. While a similar statement was made by Upbit, no statement has been made so far from the country's other cryptocurrency exchanges, Korbit and Coinone.

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Exchanges, which have to implement customer recognition (KYC) and money laundering (AML) procedures in Korea, where the trading of privacy-oriented cryptocurrencies is not allowed, has a history of delisting cryptocurrencies after issuing such warnings.

Simply put, MWED, the latest privacy-focused development of the Litecoin blockchain, hides the amount sent, enabling a mechanism of “secret” transactions on a chain. In fact, an amount sent in countries like South Korea is impossible to track and can result in heavy penalties for tax evasion. The developers added that the updates increase the throughput and processing speed of the network. Transactions that emphasize anonymity have recently been banned in European and Asian countries. For example, Monero (XMR), a privacy-focused altcoin, has been delisted by centralized cryptocurrency exchanges.


Banks working with cryptocurrency exchanges are also held responsible for their identity information in South Korea, where many medium-sized exchanges have been shuttered due to the harsh regulation rules that it issued last year and has been implementing since October 2021. While banks and exchanges do not want to take risks due to strict rules, related cryptocurrencies are generally excluded from the list after such warnings. Such a decision has not been taken for Litecoin yet, but a possible "delist" decision in the coming period should not be surprising.

According to CoinGecko data, Litecoin (LTC), which ranks 18th among cryptocurrencies with a market value of $ 5.2 million, is trading at $ 73.05 at the time of writing.