Coinberry: Buy & Sell Bitcoinlatest release: 1.22.05 ( 13th January 2022 ) last analysed 23rd September 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 ¶
In their official website, Coinberry directly states that their app is custodial.
Most crypto exchanges and brokerages, like Coinberry, are examples of a custodial wallet. Picking a custodian solution that is reputable and secure is crucial. At Coinberry, we have partnered with the Gemini Trust Company LLC™ to keep the majority of customer funds in institutional-grade cold storage.
At Coinberry, there are 2 ways in which a new customer could be verified:
Instant Verification: The quickest way to have your account verified on Coinberry! Most customers go through rapid verification and pass automatically. Once you enter your account details, your identity will be verified by our KYC/AML partners.
Manual Verification: In the case where a new customer does not pass Instant Verification, Coinberry will require verification documents to complete the process. We will just need to review your Government-Issued Photo ID and a Proof of Address document.
As Coinberry is custodial it is therefore not verifiable.
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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