The obvious reason as to why you’d want to exchange fiat into a Bitcoin or any other Crypto currency is because Bitcoin is being accepted as a mainstream form of online payments. Any avid online user would quickly find that they are in need of the services offered by an online exchange. That is where exchanges like Luno come in.
Unfortunately, Luno is quite controversial and we are also going to list down some of these reasons so that you can determine whether or not Luno is a good exchange for transacting with. Previously known as BitX, the online Crypto Currency exchange has been providing this service since 2013. It is not quite clear why they changed their name but this is most likely something to do with managerial or branding issues as opposed to reputation issues.
They are based in London but their operations are active throughout the globe. The main business is buying and selling of Bitcoins. Throughout their existence, they have managed more than a billion dollars worth of Bitcoins on this platform.
So, does this make Luno any better? Does it make them a legit Crypto currency exchange? That’s what we will find out later in this review. For now, if you want to trade Crypto currencies and make profits, use these automated trading bots.
Just like many other exchanges in this market place, Luno offers one type of a trading account. However, in order to buy or sell Bitcoins through this platform, one has to actually verify their accounts through SMS verification. Other verification methods still apply such as the requirement to submit a Government issued ID and proof of area of residence. When a user submits valid documents for verification, their account will be unlocked for higher transaction limits each month.
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At the time of writing this review, we observed that users who wanted to buy or sell 1 Bitcoin would be required to complete level 2 verification which involves submitting government issued ID and clear photo of the account holder.
This is a weird requirement and sort of an excuse since Bitcoin and other Crypto currencies are designed for anonymous transactions. So if we are going to verify our IDs and photos in order to use this platform, it defies the logic and purpose for using Bitcoins through the platform in the first place.
There is a small number of exchanges offering spot trading for Bitcoin, and Luno is one of them. Larger exchanges like Coinbase for example have access to a wide range of Crypto currencies and this gives them a greater advantage compared to smaller Crypto currency exchanges.
Luno claims that we can buy or sell Bitcoins with a minimum amount of €1. Although Luno offers spot trading, they do not support leveraged trading.
Rumors has it that Luno rebranded from its previous name due to FCA regulations in the UK. They wanted to join Fintech sandbox of the FCA. Although they’ve expanded out of the UK and are covering countries such as Singapore, Indonesia, Cape Town, Malaysia, Nigeria and South Africa, they are very much interested in the UK client base where they offer instant buy and sell services, transfers and Crypto currency wallet services. Transactions are done in Euros.
Luno is not a regulated service, and we do not think that the law requires them to be regulated. However, since they have secured their membership in the FCA sandbox, it could suggest that this Crypto exchange is intending to run a serious business.
Other than offering buying and selling services for Bitcoin, Luno offers money transfer and wallet services for Bitcoin. They also claim that majority of their clients’ funds are stored in what they call “deep freeze” storage. A deep freeze storage is a multi signature wallet where keys are stored with different bank vaults. There are multiple layers of security checks and encryption that one has to pass in order to access funds. Also, backups for their wallets are stored in encrypted format.
This simply means that Luno is taking security of their clients funds very seriously. In addition to that, a part of their clients funds are kept in a hot wallet and this is meant to facilitate cashing out of the funds in case the customer needs their money. Hot wallets are also secured with a multi signature feature where one key is held by Luno while another held by BitGo.
While this exchange looks legit, the fact of the matter is that there are many complaints against them and we cannot simply sweep these issues under the carpet and assume that everything is ok.
One client claimed that they were denied access to their account after they had funded it with Bitcoin. They got a warning message informing them that there was a problem and could not transact with the account anymore.
Their support has not been active on this matter simply because their support system keeps blocking this user. It is not clear whether this user has recovered their funds yet.
This seems to be the story for the majority of those who got their accounts blocked by Luno for whatever reason. In fact, majority of the complaints coming from real users is that they are not able to get their money out of Luno exchange.
If these complaints are to be considered, then Luno becomes quite suspicious. It smells of a scam and we do not know why and how an exchange that purports to be serious is doing this to their customers.
Where their is smoke, there must be fire. Customer reviews show that Luno is not a very reliable Crypto currency platform to buy or sell Bitcoins from. Also, the site does not have any customer support in place, which is very unprofessional. Our recommendation is that you should stay away from this site at all cost. If you want to safely exchange your Crypto currencies into fiat or vice versa, read this piece.
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