Largest cryptocurrency exchange Binance has joined the list of trading platforms that have announced they won’t support Litecoin transactions based on the network’s new privacy feature known as the MimbleWimble Extension Blocks (MWEB) function.
Binance won’t support LTC on MWEB
First introduced in November 2019, MWEB is a fungibility improvement introduced to the LTC network to enhance confidentiality between senders and receivers of LTC transactions. Recently in May 2022, an MWEB upgrade was activated on the network as a soft-fork, more like a literal extension from the main chain, that enables users the option of “sending ‘confidential’ Litecoin transactions.”
The privacy feature is now raising money laundering concerns over Litecoin, one of the long-standing cryptocurrencies, and Binance has decided not to support trades made on the MWEB function, probably for compliance reasons.
In the announcement on Monday, Binance precisely noted it will not support “deposits and withdrawals of Litecoin (LTC) that utilize the MimbleWimble Extension Blocks (MWEB) function.” It explained that MWEB offers users the option of making confidential transactions on Litecoin without revealing any transaction information.
The exchange warned users not to deposit LTC through the privacy feature as such transactions will not be recognized.
Any LTC deposits made to Binance through the MWEB function will not be received or returned as we are unable to verify the sender’s address, resulting in the direct loss of funds. To ensure security of your funds, please do not deposit LTC through the MWEB function.
Korean exchanges delist Litecoin amid privacy concern
Last week, major cryptocurrency exchanges in Korea, including Upbit and Bithumb, announced they would terminate support for LTC trading amid the MWEB function. Korean exchanges are required to record cryptocurrency transactions by law as part of the anti-money laundering (AML) policy.
Given the MWEB function conceals transactions, Litecoin now appears as a dint. Reportedly, there are five major Korean exchanges that have announced they will suspend and delist LTC from their platforms.
LTC is down over 15 percent (24h) to $42.45 during the time of writing. The market capitalization is slightly above $3 billion – the 21 largest.