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BTC-Alpha Exchange

latest release: 1.8.0 ( 31st October 2021 ) last analysed  26th October 2021 Custodial: The provider holds the keys 
3.7 ★★★★★
50 ratings
10 thousand
23rd July 2021

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Please help us spread the word discussing the risks of centralized custodians with BTC-Alpha Exchange  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 

App Description

There is no mention of wallets on this app, although it claims you can “trade the following coins” with BTC being one of them.

There are only two readable reviews, with one of them claiming (without any additional elaboration) that the exchange is a scam.

faraz izadi
★☆☆☆☆ July 25, 2021
This exchange is scam

The Site

User Agreement

Multiple quotes in the Terms of Use show that BTC-Alpha has the capability to freeze accounts.

From 9.5.:

If there is any suspicious activity related to the User’s Account, BTC-ALPHA may request additional information from the User, including authenticating documents and freeze the Account for the review time. The User is obligated to comply with these security requests or accept termination of their Account.

From 10.7.:

In case if the User discovers transaction activity, including but not limited to unknown deposits and withdrawals, on their Account that was not initiated by the User, the User shall immediately notify BTC-ALPHA of this fact and follow the instructions sent by BTC-ALPHA. Otherwise, BTC-ALPHA reserves the right to freeze the Account until the end of investigation.

From 15.1.:

BTC-ALPHA reserves the right to suspend or terminate your BTC-ALPHA Account at any time if we reasonably believe to be required to do so by the law or in order to comply with recommendations issued by a relevant government authority or recognized body for the prevention of financial crime.

The App

We downloaded the app and found most features to be the same as most cryptocurrency exchanges. There is identity verification and 2-FA. Information or access to private keys or mnemonics was not available.

Verdict

This app is a custodial exchange and thus not verifiable.

(dg)

Verdict Explained

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.
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.