South African exchange Luno limits withdrawal of Bitcoin (BTC) and other cryptocurrencies

Thu 09 Sep 2021 ▪ 10h41 ▪ 3 min read — by Hugh Renolds

Luno, one of the largest cryptocurrency exchanges in South Africa, has confirmed that it’s imposing restrictions on asset withdrawals. Platform representatives are confident that this will serve as an obstacle for criminals.

Luno Blocking transfers to Binance

As Bitcoin.com reports, despite trying to explain their actions, Luno representatives refuse to explain how exactly they are going to implement the “dynamic risk-based limits”. The limit was discovered by accident when one of the platform’s users attempted to transfer their assets from Luno to Binance. Luno declined their transaction, and when the user turned to customer support for help, it turned out that the transaction was blocked “to protect customers from fraud and financial crimes.”

Luno representatives also explained to the client that the limit is calculated individually for each user. However, the exchange is not willing to disclose any information on how the calculations of the restrictions are made.

The platform actively keeps its clients in the dark

Luno Africa General Manager Marius Reitz explained that there are many factors involved in assessing risk. He also added that clients cannot directly influence their risk assessment but can optimise it. To do this, they need to regularly update their account information.

Marius Reitz rejected suggestions that dynamic limits were introduced at the request of the financial supervision department (Finsurv). He insists that Luno’s actions are related to the intention to ensure the safety of customers and to minimise the possibility of financial crimes.

Whatever the good intentions the platform may have (or try to seem to have), what Luno did was a massive blunder in terms of both customer interaction and safety. No trader wants to suffer from limitations that they themselves cannot influence, or don’t even know about in the first place.

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Hugh Renolds

I believe in the bright future of crypto. I have been investing since 2017 and look to share my experience in, and thoughts on, crypto and the blockchain.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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