A week after Litecoin activated the long-anticipated MimbleWimble Extension Blocks (MWEB) upgrade, blockchain analytics firm, Elliptic announced adding support for the privacy feature of the cryptocurrency.
As per the official announcement, the move will allow regulated businesses to continue to support Litecoin transactions while remaining compliant with anti-money laundering (AML) regulations and sanctions. Elliptic said that its solutions will enable merchants to identify whether a Litecoin transaction or wallet includes funds that have leveraged MWEB. This information can be used by compliance professionals to analyze risk and perform further due diligence.
Elliptic is involved with businesses and government entities to assess blockchains for fraudulent activities. Tom Robinson, Chief Scientist and Co-Founder at Elliptic commented,
“By providing visibility of Mimblewimble activity, Elliptic’s transaction and wallet screening solutions provide businesses with the risk insights they need to continue to support Litecoin while meeting their legal obligations.”
According to Robinson, identification of the MWEB activity may not potentially demotivate businesses to add LTC as their payment method. The exec told CryptoPotato that “as long as businesses have visibility of when these privacy features are being used by customers, they can still perform effective due diligence and comply with regulations.”
Just days after Litecoin announced MWEB activation, it was reported that two leading South Korean cryptocurrency exchanges, UpBit and Bithumb, issued investment warning against the upgrade. The two platforms cited Korea’s Act on the Reporting and Use of Specific Financial Transaction Information as the reason behind designating the cryptocurrency as an “investment warning.” It has been noted in the past that exchanges tend to delist tokens after such warnings.
When asked if such risks persist, Robinson said:
“Exchanges or merchants don’t need to delist Litecoin because of the activation of confidential transactions through Mimblewimble. It is still perfectly possible for these businesses to comply with anti-money laundering regulations when supporting Litecoin. All cryptocurrencies have some way to hide transaction flows – be it coinjoins on Bitcoin or Tornado Cash on Ethereum.”