Cryptocurrency exchange and custodial service provider Luno will discontinue its Savings Wallet functionality from tomorrow —1 December 2022.
“Cryptocurrency held in a Savings Wallet will be transferred to primary wallets, and will continue to be stored safely and securely with Luno,” the company stated.
“All other services continue to operate as normal.”
In an email notice on Wednesday, Luno informed customers that it would soon move any cryptocurrency in a Savings Wallet to their primary wallets, including all interest earned.
The transfer will occur between 02:00 SAST and 10:00 SAST.
“While we complete this secure transfer, you will not be able to add to or transfer any cryptocurrency out of your Savings Wallets,” Luno said.
“When the secure transfer is complete, we will confirm with you by email. All your cryptocurrency from your Savings Wallets will then be in your primary wallets.”
Luno assured that customers’ primary cryptocurrency wallets would remain fully functional — it is not suspending withdrawals anywhere else on the platform.
“The closure of your Savings Wallet will not impact your ability to buy, sell, store, send and receive cryptocurrency safely and securely with Luno in any way,” it said.
“The decision to discontinue the Savings Wallet feature follows a careful review of the ongoing benefit to customers,” said Luno.
“In light of recent market events, there is no longer a sufficiently significant or stable market to offer Savings Wallet services in a way that meets our rigorous standards.”
Luno’s decision to kill off its Savings Wallet product comes after its lending partner and sister company, Genesis Global Capital, suspended redemptions and new loan originations in mid-November.
“This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion,” said Amanda Cowie, vice president of communications and marketing at Digital Currency Group (DCG).
DCG is the parent company of Luno and Genesis.
Luno launched its Bitcoin savings wallet in October 2020, adding Ethereum and USDC savings products in March 2021.
These wallets operated separately from Luno’s standard custodial service, allowing customers to earn interest on cryptocurrency balances.
To generate this yield, Luno lent out customers’ coins via Genesis.
It warned in its service terms that this comes with the risk that the counterparty might default on the loan.
Throughout the uncertainty caused by FTX’s implosion and Genesis’ announcement, Luno has assured that all funds on its platform were safe and accessible.
“Luno has previously taken steps to ensure that customers can retain access to Savings Wallet funds in the event redemptions from Genesis are not possible,” Luno founder and CEO Marcus Swanepoel said.
“We are a full global reserve platform, meaning we don’t touch your funds without your permission, and we have been publicly and independently verifying this for over a year,” Swanepoel said, referring to their quarterly proof of reserves audit conducted by Mazars.
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