Brokers want to stop trading Litecoin

South Korea has one of the most important technology hubs for cryptocurrencies in the world, one of the countries with the largest movement of cryptocurrencies in Asia, in addition to being one of the “examples” regarding regulation. As a result, certain movements that take place there are important for a cascade effect that covers the entire sector.

In an update that could be very harmful to the LitecoinExchanges in the Asian country are considering stopping trading the cryptocurrency due to the recently proposed blockchain updates.

To improve the issue of anonymity on the network, the Litecoin community has updated the . approved Mimblewimble Expansion Blocks (MWEB). Using the Mimblewimble protocol, the update aims to improve Litecoin’s privacy by adding extended blocks, where transactions are considered private.

Using this protocol is completely optional, but users can use these blocks to increase their own privacy and then send the coins back to the main network, where transactions are transparent but the sender is disguised between the protocol blocks.

The problem is that there is very strict regulation in North Korea regarding the need for brokers to declare who has made cryptocurrency transactions, similar to what is happening here in Brazil. Thus, with a currency that hides the identities of the parties involved in the transaction, brokers anticipate regulatory hurdles.

UpBit has released a statement stating that it may not be able to accept confidential Litecoin transactions due to the requirements of the Financial Disclosure Act, and this could be a reason to remove the cryptocurrency in the near future.

UpBit is not alone, with a similar statement being released by Bithumb. While others have not taken a position on this, the similar statements from the two exchanges set a very worrying precedent for Litecoin.

Under Korean law, cryptocurrency exchanges must conduct customer identification and follow strict anti-money laundering requirements. The client hidden in the trade is simply a major regulatory risk that could even legally complicate the brokerage, a risk that clearly none of them want to take.

In the past, similar statements from the country’s exchanges have served as a warning of the imminent delisting of cryptocurrency assets. This happened with trading other cryptocurrencies enabled for private transactions, including Monero, Dash, and Zcash. That is, Litecoin may soon lose a major trading platform.