South African exchange limits withdrawal to deal with illicit activites

Crypto markets and exchanges have become very prone to illegal activities. In fact, exchanges are being used as a medium to launder money. This is why to deal with the same, the South African exchange, Luno, limits withdrawal. The limit will be imposed in a special way and will depend from client to client. They believe this is going to reduce the illegal activities in the space drastically.

What did the South African exchange do?

South African exchange limits withdrawal

The first thing that Luno did was to stop transfers from their platform to Binance. We all know that how versatile Binance is, which makes it very easy to use it for illegal purposes. Luno has set “dynamic risk-based limits” as well, which will impose separate limits for different customers. The bad part is that they didn’t inform their users regarding the same, and when a user tries to transfer their crypto to Binance, they found out upon the failure of the transaction.

Upon enquiry why they imposed this new limit, they said that it was to protect their users. At the same time, Luno said that it would help them comply with the anti-fraud and financial crime laws much better. Luno also did not share how they calculate the risk scores based on which the withdrawal limit is set.

Luno’s advice to users

The exchange made it very clear that clients won’t have control over their risk scores. It will have a lot of inputs from a variety of points which will make the score. But to be on the better side of things, users are recommended to keep their account information updated. At the same time, they are also recommended to use safety features to make sure their account is not hacked.

Luno also reported that the measures they are taking were not upon the request made by the financial surveillance department. In fact, they are doing it on their own to make sure that financial crimes are kept at bay, and the exchange is very safe to use.

What are your thoughts on the fact that the South African exchange limits withdrawal to prevent financial crimes? And do you think that the step taken by them will be helpful? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.

Also Read: NFT volume decline 50% as markets see momentum shift.