The MWEB improvement for Litecoin, which keeps transactions private, comes at a time when the majority of crypto exchanges are enforcing tight KYC and AML policies.
Binance, a cryptocurrency exchange, has announced that it would no longer allow Litecoin (LTC) transactions received through the most recent MimbleWimble (MWEB) upgrade.
Because the crypto exchange can't validate the sender's address, any transaction submitted through the MWEB feature will be lost, according to Binance. The announcement comes only days after LTC was delisted by major South Korean crypto exchanges owing to a recent upgrade that renders transaction information private. The delisting occurred just weeks after five other cryptocurrency exchanges issued similar warnings. The delisting was expected, given South Korea is notorious for its strong privacy rules, which ban anonymous transactions on cryptocurrency exchanges.
One of the important changes that went live earlier this year, some two and a half years after it was first planned, was the MWEB upgrade on LTC. The upgrade improved the LTC blockchain's scalability and included various privacy features.
Another major crypto trading platform, Gate.io, has stopped supporting MWEB Litecoin transactions, stating that the platform does not permit anonymous transactions.
The decision to discontinue support for the MWEB function comes at a time when the world's most popular cryptocurrency exchange has been dogged by controversy. Reuters has accused Binance of enabling $2.5 billion in illegal deals.
All of these charges were denied by Chagpeng Zhao (CZ), the CEO of Binance, who used data supplied by blockchain analytics firm Chainalysis. The Securities and Exchange Commission of the United States has also initiated an investigation into Binance's BNB ICO sale in 2017.
The privacy feature, which was hailed as a significant advancement, has proven to be a curse for one of the oldest cryptocurrencies. The MWEB upgrade comes at a time when regulatory scrutiny is at an all-time high, and privacy features have become a top priority for authorities all over the world.
