Will Litecoin Be Delisted if It Becomes a Privacy Coin?

2021-1-7 23:40

Bittrex recently made the decision to delist Monero, Zcash, Dash, and Grin. Those delistings raise questions about the future of Litecoin, which also has plans to add privacy features.

Is Grin’s Delisting a Bad Sign for Litecoin?

It is notable that Bittrex has decided to delist Grin, which uses the Mimblewimble privacy protocol to obscure transactions. Litecoin, incidentally, plans to implement confidential transactions based on the same Mimblewimble protocol in the coming months.

However, since Mimblewimble is an optional feature via extension blocks, Litecoin will probably steer clear from exchange delistings.

David Schwartz, a director at the Litecoin Foundation, told Crypto Briefing that Litecoin is different from Grin. Whereas Grin was built on Mimblewimble, Mimblewimble on Litecoin “will be an opt-in feature as an extension block.” He added that this “is obviously different and preserves the original state of the [Litecoin] blockchain.”

David Burkett, who is in charge of Litecoin’s Mimblewimble implementation, told Crypto Briefing that he “sincerely doubts” that Litecoin will be delisted by Bittrex or other exchanges.

He explained that Litecoin won’t be a true privacy coin, but a “medium of exchange with an additional opt-in privacy layer to provide better fungibility.” He concluded: “Delisting it would just be silly.”

Burkett refrained from speculating on the reasons that Bittrex delisted Grin or any other privacy coins.

Crypto Exchanges Shedding Privacy Tokens

Bittrex is a relatively small, low-volume exchange compared to the likes of Binance and Coinbase. However, its decision to delist Monero, Dash, Zcash and Grin has built apprehensions of widespread suspensions of privacy-centric tokens.

Past delistings also are a cause for concern. In addition to Bittrex, Asian exchanges like OKEx Korea and Upbit have removed privacy-focused cryptocurrencies from their platform. So has the U.S.-based exchange Shapeshift.  Additionally, the European exchange Bitbay has delisted Monero.

Though Bittrex has not given specific reasons for its decision to delist privacy coins, regulations have likely led it to perceive privacy features as a risk when it comes to KYC/AML compliance.

If Litecoin developers are correct, optional privacy features will make delistings less likely. However, since Litecoin has not yet released Mimblewimble, it is unclear whether exchanges will see it as a risk.

At the time of writing this author held Bitcoin and less than $15 of altcoins.

Update: This article previously claimed that extension blocks and Mimblewimble are a “layer two” feature. In fact, they are considered a “layer one” feature, according to David Burkett of Mimblewimble.

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