Bitwells - Easy Bitcoin/Crypto Futures Tradinglatest release: 1.0.5 ( 2nd June 2021 ) last analysed 26th October 2021 Custodial: The provider holds the keys
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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.
The Analysis ¶
Bitwells describes itself as a:
Financial derivatives trading platform focusing on the Bitcoin market, providing futures leveraged trading of mainstream digital currencies like Bitcoin, Ethereum, Litecoin, Ripple, etc.
The app claims that it does not require KYC
Section 11. Termination & Remedies for Breach of these Terms by You
a) Bitwells reserves the right to seek all remedies available at law and in equity for violations of these Terms, including without limitation, the right to restrict, suspend or terminate your account or deny you access to the Website without notice; and b) Bitwells shall be entitled to disclose your user identity and personal details if required or requested by a court of law, governmental agency or any other law enforcement authority in such circumstances as Bitwells in its sole discretion considers reasonably necessary or appropriate.
We downloaded the app, and it was possible to deposit and withdraw Bitcoin.
Security measures include:
- Google Authenticator
- Touch ID
Seed phrases, mnemonics or backup of private keys are not available
As a futures trading platform and even without KYC, this app is centralized with the app developers. As stated in their user-agreement, Bitwells even has the power to inform authorities of their users’ identities. With no seed-phrase, private keys backup or any features resembling those, it is safe to say that this service is custodial. The app cannot be verified.
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 not, we tag it Custodial!
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.
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