Velvet yarns are great for crochet at tight gauge, but don't try knitting with them at a relaxed gauge. Then the loops tend to "worm" and stick out and soon you have a mess. Crochet a firm fabric and those lovely soft velvet loops will stay put. Good job!
I can imagine it becoming a mess when knitting now that you've described it. I don't think I would ever feel comfortable knitting with this yarn, not at least until I can be consistent with keeping the correct gauge.
I am really loving how well it looks crocheted. Thanks so much ~