Loading...
Breaking News
recent

Don’t send your Bitcoin Cash to Luno (cryptocurrency owner lost R35,000)

A cryptocurrency owner recently contacted MyBroadband after sending over R35,000 worth of Bitcoin Cash to his Luno wallet by mistake.
His Luno wallet is a BTC (Bitcoin) address, and was not set up to receive BCH (Bitcoin Cash).
As Bitcoin Cash is a fork of the Bitcoin blockchain and shares the same address structure, however, the transaction did not fail as it may have with two different cryptocurrencies.
The customer was told his Bitcoin Cash was unrecoverable and he was left out of pocket.

Wrong address

The scenario started when the Luno user was set to purchase an ASIC Antminer from Bitmain, which only accepted Bitcoin Cash as payment.
He bought Bitcoin from Luno using rand, and then converted his Bitcoin into Bitcoin Cash using the ShapeShift exchange tool.
The plan was to convert the BTC and send the resultant BCH to the Bitmain BCH payment address.
Instead of entering the Bitmain address into the BCH recipient field, however, he mistakenly entered his Luno BTC wallet address.
As Bitcoin Cash is a fork of Bitcoin, it meant the Luno BTC address was compatible with the BCH blockchain – the amount could technically be recovered if the user held his own private key.
As Luno holds the private keys of users’ wallets, he contacted the company to recover his funds.

The recovery

After explaining the issue to Luno, the company stated it could not recover the Bitcoin Cash he sent to his BTC address.
Luno said it did not have the infrastructure or resources to support Bitcoin Cash wallets, but if it added support for the blockchain in future, he may be able to access his funds.
If the user had held his own private key, he would be able to install a Bitcoin Cash node on his PC and access the funds using the same address and private key as his Bitcoin account.
Due to the nature of Luno’s private key storage and multi-signature wallets, it was unable to provide the user with his lost funds.

Luno policy

Luno spokesperson Werner van Rooyen told MyBroadband that while it is technically possible to access BCH sent to a BTC wallet using the private keys, this would take significant resources and require the company to adapt its infrastructure.
“Technically, it is possible to retrieve BCH if it has been sent to a BTC wallet address, if you have access to the private keys,” said van Rooyen.
“If Luno was to build a mechanism to retrieve the BCH tokens accidentally sent to a BTC address, it would take significant resources.”
He said the process of retrieving BCH tokens would include an internal audit of unallocated non-BTC in all wallets, the creation of a mechanism to export private keys, permission changes for staff in order to access these accounts, and the processing of payments on the BCH blockchain.
“Right now, if someone did accidentally send Bitcoin Cash to a Bitcoin wallet on Luno, the Bitcoin Cash will be inaccessible, but safe. It will automatically be stored and we won’t do anything with it,” said van Rooyen.
Luno said creating a mechanism to extract non-BTC tokens from BTC wallets is a possibility in the future.
“It’s on our technical roadmap to review creating a mechanism to find forked coins that got sent to a Bitcoin wallet address,” said van Rooyen.
“Right now, there have been very few people who made mistakes like that, so it’s impossible to give an exact timeline for this.”
Van Rooyen said irreversible transactions on the Bitcoin blockchain are a feature, not a flaw, and advised users to be careful when sending cryptocurrencies.
Khabza Mkhize

The Edge Search

Powered by Blogger.