Binance, the world’s largest cryptocurrency exchange, officially confirmed on June 13th that they will no longer support Litecoin transactions due to security concerns based on the new privacy feature of the platform known as the MimbleWimble Extension Blocks (MWEB).
#Binance will not support the deposits and withdrawals of @litecoin $LTC utilising MimbleWimble Extension Blocks (MWEB).https://t.co/YZRrIgXJzF
— Binance (@binance) June 13, 2022
Binance will not support Litecoin on MWEB
MWEB started in November 2019, is a fungibility feature provided to the Litecoin networks which strengthen confidentiality among donors and receivers of Litecoin payment transactions. An MWEB update was recently implemented on the network in May 2022, that allows users to send private Litecoin transactions.
Mimblewimble and Extension blocks are the two primary sets of technologies on which MWEB is built. Mimblewimble, called after Harry Potter’s tongue-tying spell, was a proposal put up in 2016 by “Tom Elvis Judesor,” an unnamed Bitcoin user who found out an effective means of producing a scalable variant of Private Transactions with a few extra features. Extension Blocks, on either side, were a concept made in 2017 by Bitcoin Developer Johnson Lau that became particularly popular during the block size disputes as a potential mechanism for raising the Bitcoin block size.
The Litecoin WimbleWimble Extension Block is an update that aims to improve users’ security and scalability provided by Litecoin Foundation.
Litecoin users may use this function to transfer money from the wallets to any account without disclosing their personal data, making transactions more secretive.
The confidentiality feature has generated money laundering issues about Litecoin which is one of the oldest cryptocurrency. So, Binance has opted not to enable transactions performed using the MWEB function.
Binance specifically declared that it would not handle “Litecoin withdrawals and deposits that use the MimbleWimble Extension Blocks (MWEB) feature.” It also said that MWEB allows users to conduct secret Litecoin trades without disclosing any transaction details.
The exchange has urged customers not to transfer Litecoin using the privacy option since such trades would be denied.
“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.”
Litecoin functionality concern by Binance
There have been several cases of crypto robberies involving massive amounts of money in recent years. While attackers have been fortunate in stealing money from unknowing victims, the challenge these criminals have always experienced is withdrawing the money.
Binance is concerned that the Litecoin Foundation’s new functionality may be extensively embraced by hackers searching for methods to remove stolen money.
Due to the increasing number of malicious operations in the cryptocurrency area, the exchange has decided not to pursue Litecoin transfers using the MWEB feature.
Binance has also issued a risk warning, stating:
“Cryptocurrency trading is subject to high market risk. Please make your trades cautiously. You are advised that Binance is not responsible for your trading losses.”
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