Elliptic has become the first blockchain analytics provider to support the Mimblewimble privacy feature on Litecoin.
The move will enable regulated businesses to continue to support Litecoin transactions, while remaining compliant with anti-money laundering regulations and sanctions.
The Mimblewimble protocol was incorporated into Litecoin last week, and gives users the option to to send ‘confidential’ transactions, which conceal the participants and amounts involved. This is a challenge for businesses engaging in Litecoin transactions, which must comply with anti-money laundering regulations or sanctions, since they use this information to assess risk.
Elliptic’s solutions do not seek to trace or deanonymise confidential Litecoin transactions. Instead they allow businesses to identify whether a Litecoin transaction or wallet includes funds that have made use of this privacy feature. Compliance professionals can then use this information to assess risk and perform further due diligence.
“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,” explained Dr Tom Robinson, Chief Scientist at Elliptic.
Elliptic has previously added support for other privacy-preserving technologies. In 2020 support was added for the Zcash and ZEN privacy coins.