Today i would like to tell a story about cryptocurrencies, a big well known exchange and how it betray the very idea of cryptocurrencies at the expenses of the little investors and users.
I’m a long time Bitcoin investor and user, i actively use cryptocurrencies since 2010. In those years i’ve used the services of many different exchanges to buy and sell cryptos, and i ever stick on the safe side by don’t leave my money on the exchange, but instead to transfer the coins immediatly after buying them to my own cold wallet.
This saved me from many scams and failure, starting from the (in)famous fail of the first and bigger (at the era) exchange, Mt Gox, and other following it.
Fast forward to this last November 2021, a close South African family member has to transfer to me some money ( 50.000 ZAR ) and we agreed to make the transfer using Bitcoin. This person, i will call her “D” from now, never used Crypto before, so, i decide to help her setting up an exchange account to buy bitcoin so she can send them to my own personal wallet.
There are few options to buy BTC from South Africa, but without any dubt the most well known exchange is Luno ( https://www.luno.com ). Before to proceed to open an account, i carefully read the FAQs and the documentation on the Luno Website
From the documentation Luno declares that they set some limits on the amount you can withdraw, buy or send depending on the level of verification you apply for. For a 50000 ZAR transfer we have to apply for level 2 verification, sending them an identity document and a photo. Nothing else appears to be needed. They also stated that the send functionality is by default not enabled, and you need to enable it from the app or website and it will take up to 24 hours to enable it.
Here few screenshot from the Luno Website as per today, 13 of december 2021:
So far so good, everything seems ok for us, so, we proceed to open an account on the 29th of november, immediatly send the documents needed to verify the account on level 2, and proceed to make a bank transfer for R50000 to Luno.
On the 1st of december the amount is available on D Luno account, and immediatly we proceed to buy 0.05 BTC, and to enable the send functionality to be able to make the transfer of the coins to my wallet.
The day after, on the 2nd of December, D receive the notification that the account has been verified correctly and that the Send functionality has been activated, so, we login in the Luno wallet and try to send the BTC full amount to my own BTC address.
For our surprise it doesn’t work, a message appears with NO indication on what’s wrong:
Trying to send using the website instead of the app on the phone seems to work better, we are apparently able to make the transaction, a two steps authorization link is sent to the phone app, and after authorizing the transaction everything seems to work correctly. Except it isn’t: the transaction remain in “pending” status on the website, and on the blockchain there is no trace of it even after more than 24 hours: they never sent the transaction to the blockchain.
At this point we contact them, on the 3rd of December, to notify them if the problem.
The answer is shocking: D account is “locked” for “security reason” and to be able to send bitcoin to another wallet we need to send them more documentation ( proof or residence, 3 months bank account statements ) than the requested for level 3 verification ( despite on the documentation it’s clear that shouldn’t be needed for that amount ) and more, they are asking also who is the owner of the wallet receiving and the reason of the transfer (!!! what a joke! ). Despite starting to be pissed of by them, we provide them the requested documentation.
After 2 days Luno contact D by phone for some additional questions and to ask her to put ONLY her phone as trusted device on the Luno account, saying that is needed to unlock the account and finally let us make the transaction. We proceed with that on the 8th of December.
Since that we didn’t had any more answer from them despite the many message from us on the ticket open on the luno account, and our BTC still locked in Luno without a way to send the amount to any external wallet.
Don’t use Luno, they don’t really support cryptocurrencies for what they are, currencies, but only for gambling on the market limited to the use of Luno as broker.
Luno isn’t an exchange, is a broker.
UPDATE 14 December:
Yesterday i posted this page on many Luno social network accounts, results: they banned me from the Luno Facebook page and deleted all my comments.
Meanwhile i contacted the CEO of Luno on Facebook he accepted my friend request and answer on messenger, but not only he wasn’t able to help me as he wasn’t logged in the the system, but he also ask me to give him the password of my account with those words “Trust me, i’m here to help”. I repeat, the CEO of Luno asked me to give him ON A FUCKING CLEAR TEXT UNSECURE CHANNEL my password.
But that’s not enough, this morning finally we received an answer to our ticket on the Luno website and by email: this time they say we trusted an iphone 11 pro while we said D has an iphone 12, so, basically they get more time? i answered after few minutes saying that the iphone 11 pro is the right one, no answer since then.