Binance Declines MWEB Support for Litecoin Transactions
The largest cryptocurrency exchange by trading volume, Binance, announced today that it will not facilitate deposits and withdrawals using the MimbleWimble Extensions Block (MWEB) feature for Litecoin (LTC). The exchange cited security concerns as the primary factor behind this decision. Binance has a history of delisting various cryptocurrencies for similar security-related reasons. Notably, on March 8, 2022, the exchange removed Bitcoin Diamond (BCD), Cindicator (CND), Monetha (MTH), Nitro Network (NCASH), and YOYOW (YOYO) from its platform.
Understanding MWEB’s Functionality
MWEB is an optional feature that users can choose to enable while conducting transactions on the Litecoin main chain. While crypto wallets can incorporate this feature, it is not mandatory for executing Litecoin transactions. On June 13, Binance issued a statement indicating that it would not accept any responsibility for losses incurred if users deposited LTC using the MWEB feature. Consequently, Binance will not be held liable for any financial losses that users may face.
Any LTC deposits directed to Binance via the MWEB function will not be processed or refunded, as the exchange cannot verify the sender’s address, leading to a total loss of those funds. Even though numerous high-profile exchanges have experienced hacks recently, cybercriminals have not yet found a reliable method to exploit and withdraw funds. However, Binance remains concerned that hackers could potentially misuse the Litecoin Foundation’s MWEB feature to commit theft.
The MWEB Upgrade and Its Origins
The MimbleWimble Extensions were initially proposed in 2016 by developer Tom Elvis Jedusor, aimed at enhancing transaction privacy. On May 19, 2022, the Litecoin network successfully integrated the MimbleWimble upgrade, which focuses on both privacy and scalability. Currently, Litecoin’s market price stands at $43.72, according to the latest trading data. The development of the MimbleWimble protocol for Litecoin was managed by David Burkett in collaboration with a Grin++ developer. This feature allows Litecoin holders to send funds to any address without disclosing personal information, effectively making transactions more private. Additionally, it grants users the ability to monitor the number of LTC tokens they send or receive, as well as the balance of their MWEB address.
Recent Delisting of Litecoin by South Korean Exchanges
Binance’s announcement regarding MWEB transactions comes shortly after five leading cryptocurrency exchanges in South Korea declared they would delist Litecoin on June 8, following the implementation of the MimbleWimble upgrade. According to a tweet from 8BTCnews on June 8, the exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—publicly stated their decision to remove Litecoin (LTC) from their platforms.
Upbit cited in its official statement that the choice to discontinue support for Litecoin (LTC) was made because the optional feature that conceals transaction details aligns with anonymous transmission technologies prohibited under the Specific Financial Information Act. South Korea has a longstanding reputation for stringent privacy regulations that restrict anonymous cryptocurrency transactions.
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