Binance has said that it would no longer handle Litecoin transactions performed using the MimbleWimble Extension Blocks feature. The most recent Litecoin feature allows users to conduct private Litecoin transactions without divulging any details relating to the transaction including the sender’s address.
According to the cryptocurrency exchange, any Litecoin transactions made with the MimbleWimble Extension Block will not be approved or refunded. It stated that this is because it failed to validate the sender’s address and warned that transacting users may eventually lose cash.
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Binance Comes Under Regulatory Scrutiny
Binance recently came under regulatory scrutiny following a Reuter’s story alleging that the world’s largest cryptocurrency exchange has made it possible for at least $2.35 billion in fraudulent deals.
According to Reuters, Binance was used as a “conduit” for unethical acts to clean their crypto gains made via hacks, investment schemes, and drug sales between 2017 and 2021.
According to the investigation, the North Korean Lazarus organization utilized the exchange to siphon profits from the 2020 Eterbase breach.
Although a Binance representative called the claim “woefully misguided,” it adds to the crypto exchange giant’s difficulties, which is already under the scrutiny of a number probes from various agencies.
The US Securities and Exchange Commission initiated an inquiry into trading affiliates of Binance’s CEO, Changpeng Zhao, in February. The cryptocurrency exchange was also the target of investigations by the United States Commodity Futures Trading Commission, the United States Justice Department, and the United States Internal Revenue Service.
Binance has been forced to cease operations by the Financial Conduct Authority in the United Kingdom last year. In Canada, it faced a similar shutdown, which it ascribed to Ontario being a “limited jurisdiction.”
What Does This Mean For Litecoin?
On May 19, 2022, the Litecoin MimbleWimble Extension Block feature was triggered as part of a long-awaited update. It was created as part of the Litecoin Improvement Proposal to improve network anonymity. However, it has aroused anti-money laundering concerns among numerous exchanges since its start.
Binance’s announcement comes only days after South Korean cryptocurrency exchanges Bithumb and UPbit announced the delisting of the coin.
The cryptocurrency exchanges expressed concern about new Litecoin innovations that permit more confidentiality while doing transactions. According to their alerts, the heightened privacy users violate South Korean anti-money laundering (AML) legislation.
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Gate.io, a cryptocurrency trading site, announced similar discontinuation of support for Litecoin transactions performed with the MimbleWimble Extension Block, saying that anonymous transactions on the platform are not authorized.
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