Cryptology: Blockchain WalletLatest release: 3.15 ( 10th June 2022 ) 🔍 Last analysed 8th 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 ¶
The app allows the purchase, selling and exchange of various cryptocurrencies. Purchase options include: Visa, Mastercard, Boleto, Loterica, Deposit Express & EU Online Banking Payment.
It supports many cryptocurrencies including: BTC, ETH, BCH, LTC, XRP, XLM and ZEC. It also supports DeFi tokens. Anonymous transactions is a feature that they claim to make trading more profitable and easier. Perhaps the most notable indicator for a custodial service is their usage of cold storage.
Maximum security by storing assets in a cold wallet
We visited the site and it looks like a cryptocurrency exchange. In the main page, it is described as:
Secure & Regulated
Authorized to provide fiat to digital asset exchange services by the Financial Investigations Unit.
Terms and Conditions
In Section 3, paragraph 10,
You agree that Cryptology may, in its sole discretion and without prior notice, terminate your access to its services and/or block your future access to your Cryptology Account if it determines that you have violated these Terms and Conditions or other agreements which may be associated with your use of our Services.
We downloaded the app and sign-in is also possible through Google or Facebook. Upon email verification, the first screen encourages users to Buy Crypto using Visa or Mastercard, by which you will receive BTC.
The fourth menu is “Wallets”. Clicking on it shows you BTC, ETH, XRP, USDT or XLM as well as others. When you click on BTC, it allows you to purchase BTC with a card.
Clicking on ‘All Wallets’ under ‘Exchange’ allows you to get your BTC address on the platform. Depositing, Receiving and Transfer requires the user to pass basic verification. Basic verification requires the user to submit: Passport, Driving License, and/or National ID. This goes against their claim on their Google page guaranteeing that users will “stay anonymous with Cryptology”.
With KYC verification, account termination, cold-storage and the non-provision of mnemonic backups, this app is a custodial app and therefore is 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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