Why crypto exchange Bitvavo chose to compensate LUNA holders » Crypto Insiders

As a result of the collapse of Terra (LUNA), a lot of major crypto exchanges had removed the altcoin from their platform, including the Dutch Bitvavo. They decided to pause trading in LUNA after the network still ran out of liquidity. This pause, however, was short-lived. Battle resumed trading in LUNA fairly quickly and even announced that they were going to compensate LUNA holders.

Crypto Insiders recently asked Bitvavo some questions about this bizarre chapter in the crypto world and talked to Marcel Ribbens, Head of Brand and Communications at Bitvavo. Why did Bitvavo want users would be compensated† Why did LUNA’s trade resume so quickly? You can read that and more in this short insightful article.

Why did Bitvavo choose to compensate LUNA holders?

Stopping trading is something we as a stock exchange never want to do. We want to provide our users with every opportunity to invest and trade. Due to the situation and the instability of the market, we have decided to pause trading. At the time, users couldn’t sell their LUNA, so we wanted to make sure none of our users were adversely affected by our decision. In addition to the compensation, LUNA holders kept their LUNA, so we gave our users the best of both worlds.

What was the rationale for eventually turning LUNA trading back on?

As I mentioned, we want to give our users every opportunity to trade in stable markets. Once we could guarantee a good experience and sufficient liquidity, it was an easy decision to reopen that market.

Has the (Twitter) community had any influence on this yet?

We always follow the conversations on various social media and we also saw a lot of support tickets asking us to reopen the market. Fortunately, reopening that market had been our intention all along and we knew we would reopen trading once we were sure that the market would be liquid and stable.

How much is such compensation worth?

LUNA holders on Bitvavo received both the monetary value of their LUNA and their LUNA, so it is a real win-win situation for our users. If LUNA lost all value our users would still receive some compensation and if LUNA survived they could trade again with the LUNA they bought before the market closed. This is our way of acting as a reliable party, which we are sure both existing and new users will appreciate.

What about crypto offsets in general anyway?

Our main focus is on ourselves and what we can do to give our users the best crypto experience. Whether or not other exchanges have compensated their users is irrelevant to us. We want our users to know that Bitvavo is behind them and that they can count on us to help them. That we help them navigate the stormy seas of crypto. That said, to our knowledge no other exchange has compensated their users like Bitvavo has, so we are proud and hope other exchanges will follow suit.

What else does Bitvavo do to protect its customers’ assets and data?

The vast majority of assets on Bitvavo are stored in cold storagewallets with multi-sig limiting the power of a single individual. Access to these wallets is highly regulated and monitored at all times. The vaults we use to keep data and assets safe are literally the highest grade vaults available in the Netherlands, and in addition, our custody providers are insured against losses of up to $250 million. We can safely say that we do everything in our power to protect our users and data.

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