Federal High Court Freezes LUNO Bitcoin Exchange Account In Nigeria


For those of you who deal with cryptocurrency in Nigeria, chances are you know that exchange company called LUNO. They are the most Secure Bitcoin trading platform in Nigeria but because of a third party incident,the Federal High Court has ordered their account in IBTC Bank frozen. 

It was gathered that someone used their account to exchange fund gotten via fraudulent activities. Since Friday, 31st March 2017, LUNO has been unable to process NGN withdrawals as a result of this court order.

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LUNO Press Statement Reads...

Since 31st March, 2017, we have been unable to process NGN withdrawals. The reason is that our bank account at Stanbic IBTC, which contains the vast majority of customer funds, has been frozen due to an unforeseen third party issue beyond our control.

All customer funds are safe and accounted for in the account. Right now we are unable to make any payments out of the account until it is unfrozen. For the time being, we ask you to refrain from funding your account with NGN.

What can be done in the meantime?

NGN deposits and withdrawals are currently disabled. All other services, such as buying, selling, trading, sending and receiving Bitcoin remain unaffected.

If you have a pending withdrawal that you’d like to cancel, you can do so by opening the “transactions” screen, tapping on the withdrawal and then pressing the “cancel” button. The NGN amount will then be refunded to your wallet. It is of course still possible to convert NGN to BTC and withdraw BTC.

We have been working on integrating a new debit card payment method through a different bank. We will accelerate this project and hope to enable debit card deposits soon. However, we will still be unable to process withdrawals until the bulk of customer funds in our Stanbic IBTC account are unfrozen.

Why the account was frozen?

In short, a fraudster stole the identity of a victim (not a Luno customer) and managed to access the victim’s bank account. The fraudster then created an account at Luno, using the stolen identity, and transferred the victim’s money to Luno and converted it to Bitcoin. Once the victim discovered the theft, they reported it to the police who obtained a court order to freeze Luno’s entire bank account (not just the fraudulent amount).

The police and court were unaware that Luno was a business serving thousands of customers and that blocking the account would affect thousands of people, not just this one individual payment. We believe that this was a huge mistake made by the police and court. We are in the process of fixing it now, but unfortunately due to the bureaucratic processes involved it will take time (more details below).

What we are doing and how long it will take?

Since we first discovered this, the victim has withdrawn their case. However, once a court order has been issued, it cannot be simply reversed. We must obtain a new court order to unfreeze the account from a higher court. We are working with our legal team to do this as fast as possible but unfortunately it is a slow and bureaucratic process.

The current estimate for re-activation of the bank account is 3-4 weeks. We are doing everything we can to sort out this problem as quickly as possible.

Follow our status page for the latest updates about this issue: https://luno.statuspage.io/incidents/w3vyyjzg0kp5

Closing remarks

We deeply regret the situation that has happened here and while we are trying to resolve it as quickly as possible, we understand that it represents a massive disruption for our customers. We ask that you try to understand the situation and the timelines involved. All funds are accounted for and all withdrawals will be processed, it will just take time.

Team Luno"
Federal High Court Freezes LUNO Bitcoin Exchange Account In Nigeria Federal High Court Freezes LUNO Bitcoin Exchange Account In Nigeria Reviewed by Exlink Lodge on Wednesday, April 12, 2017 Rating: 5

8 comments:

Unknown said...

This is Werner, Head of Marketing at Luno.

Note that we're making a lot of progress with this incident. We are in the process of moving to different financial providers (for more reliable deposits and withdrawals). Also note that the issue was due to a communication issue: the order was placed that the disputed funds (a very small amount) be frozen, but the bank, incorrectly, froze the entire balance.

Thanks for the patience and support during this frustrating time.

Luno Nigeria

Werner said...

This is Werner, Head of Marketing at Luno.

Please note that we're making a lot of progress with this matter. The order was that the funds in dispute (a very small amount) be frozen but the bank, incorrectly, froze ALL our funds. This affects our operations and our customers' ability to withdraw Naira.

We are in the process of moving to different and more reliable deposit and withdrawal providers. We'll update our Nigerian community as soon as this happens.

Thanks for the patience and support during this frustrating time.

Werner,
Luno

Exlink Lodge said...

Hello

Well I have no doubt that you will rise to the occasion. You are not called the best and trusted exchange platform in Nigeria for nothing.

Hope you resolve this issue as swift as possible.

Werner said...

Thanks so much for the kind words! I'll be sharing it with out team. Comments like that is really what keeps us going.

We're working around the clock to resolve the issue. We'll have things back to normal (or make that: BETTER than normal) real soon.

Werner (and the entire Luno team)

Exlink Lodge said...

pleasure

Anonymous said...

I think things have really gone out of Hand at luno. Its been months since this incidence occured but there is been no progress seen by many luno customers in Nigeria. Maybe it will be fair to let us know the truth and let us count our losses.

Exlink Lodge said...

Hi

I have not used Luno for quite sometime now. Havn't the issue been resolved?

Werner said...

Hi there, Werner from Luno again, here. Yes, the situation has been resolved and all features, including naira deposits and withdrawals, has resumed :-)

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