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FMCPAY

Latest release: 1.12 ( 23rd November 2022 ) 🔍 Last analysed 6th July 2022 . Custodial: The provider holds the keys
3 ★★★★★
10 thousand
1st September 2021

As the provider of this product holds the keys, verifiability of the product is not relevant to the security of the funds!

As part of our Methodology, we ask:

Is the product self-custodial?

If the answer is "no", we mark it as "Custodial: The provider holds the keys".

A custodial service is a service where the funds are held by a third party like the provider. The custodial service can at any point steal all the funds of all the users at their discretion. Our investigations stop there.

Some services might claim their setup is super secure, that they don’t actually have access to the funds, or that the access is shared between multiple parties. For our evaluation of it being a wallet, these details are irrelevant. They might be a trustworthy Bitcoin bank and they might be a better fit for certain users than being your own bank but our investigation still stops there as we are only interested in wallets.

Products that claim to be non-custodial but feature custodial accounts without very clearly marking those as custodial are also considered “custodial” as a whole to avoid misguiding users that follow our assessment.

This verdict means that the provider might or might not publish source code and maybe it is even possible to reproduce the build from the source code but as it is custodial, the provider already has control over the funds, so it is not a wallet where you would be in exclusive control of your funds.

We have to acknowledge that a huge majority of Bitcoiners are currently using custodial Bitcoin banks. If you do, please:

  • Do your own research if the provider is trust-worthy!
  • Check if you know at least enough about them so you can sue them when you have to!
  • Check if the provider is under a jurisdiction that will allow them to release your funds when you need them?
  • Check if the provider is taking security measures proportional to the amount of funds secured? If they have a million users and don’t use cold storage, that hot wallet is a million times more valuable for hackers to attack. A million times more effort will be taken by hackers to infiltrate their security systems.
The product cannot be independently verified. If the provider puts your funds at risk on purpose or by accident, you will probably not know about the issue before people start losing money. If the provider is more criminally inclined he might have collected all the backups of all the wallets, ready to be emptied at the press of a button. The product might have a formidable track record but out of distress or change in management turns out to be evil from some point on, with nobody outside ever knowing before it is too late.

Help spread awareness for build reproducibility

Please help us spread the word discussing the risks of centralized custodians with FMCPAY  via their Twitter!

Do your own research!

Try out searching for "lost bitcoins", "stole my money" or "scammers" together with the wallet's name, even if you think the wallet is generally trustworthy. For all the bigger wallets you will find accusations. Make sure you understand why they were made and if you are comfortable with the provider's reaction.

If you find something we should include, you can create an issue or edit this analysis yourself and create a merge request for your changes.

The Analysis 

FMCPay is a cryptocurrency trading platform. According to the app’s description, it “supports multiple security features 2FA, multi-signature (Multi-Signature), assets stored by cold wallet.”

From FMCPay’s page, “About Wallets”:

Your keys are protected with Secure Enclave and biometric authentication technology.

Because the app advertises a cold wallet and the providers protecting your keys, it leans toward a custodial verdict. Additionally, here is a paragraph from the Terms of Use.

You hereby agree that, FMCPay shall have the right to terminate all or part of FMCPay Service to you, temporarily freeze or permanently freeze (cancel) the authorizations of your account on FMCPay at FMCPay’s sole discretion, without any prior notice, for whatsoever reason, and FMCPay shall not be liable to you; however, FMCPay shall have the right to keep and use the transaction data, records and other information that is related to such account.

The app allows multiple coin wallets to be created. However, none of these allow for backing up the private keys. Once the user finishes the registration, additional features will be made available after passing identity verification.

This app advertises a cold wallet and claims that the providers protect your keys with “Secure Enclave” technology. We feel that this is enough to qualify it as custodial.

(dg)