DFX DeFiChain Wallet
Google PlayOur wallet review process
We examine wallets starting at the code level and continue all the way up to the finished app that lives on your device. Provided below is an outline of each of these steps along with security tips for you and general test results.
Released
24th August 2021
Custody
No BTC
Also This product was removed from the platform.
As part of our Methodology, we ask: Is the product self-custodial?
However, we did not run this test because we failed at a preceding test.
Read more
Source code
Application build
Build cannot be done because the source code is not publicly available.Passed 3 of 8 tests
We answered the following questions in this order:
We stopped asking questions after we encountered a failed answer.
The answer is "yes".
If the answer was "no", we would mark it as "Few users" and the following would apply:
The answer is "no". We marked it as "Few users".
We did not ask this question because we failed at a previous question.
If the answer was "no", we would mark it as "Few users" and the following would apply:
We focus on products that have the biggest impact if things go wrong and this one probably doesn’t have many users according to data publicly available.
The answer is "yes".
If the answer was "no", we would mark it as "Fake" and the following would apply:
The answer is "no". We marked it as "Fake".
We did not ask this question because we failed at a previous question.
If the answer was "no", we would mark it as "Fake" and the following would apply:
The bigger wallets often get imitated by scammers that abuse the reputation of the product by imitating its name, logo or both.
Imitating a competitor is a huge red flag and we urge you to not put any money into this product!
The answer is "yes".
If the answer was "no", we would mark it as "Not a wallet" and the following would apply:
The answer is "no". We marked it as "Not a wallet".
We did not ask this question because we failed at a previous question.
If the answer was "no", we would mark it as "Not a wallet" and the following would apply:
If it’s called “wallet” but is actually only a portfolio tracker, we don’t look any deeper, assuming it is not meant to control funds. What has no funds, can’t lose your coins. It might still leak your financial history!
If you can buy Bitcoins with this app but only into another wallet, it’s not a wallet itself.
The answer is "yes".
If the answer was "no", we would mark it as "A wallet but not for Bitcoin" and the following would apply:
The answer is "no". We marked it as "A wallet but not for Bitcoin".
We did not ask this question because we failed at a previous question.
If the answer was "no", we would mark it as "A wallet but not for Bitcoin" and the following would apply:
At this point we only look into wallets that at least also support BTC.
The answer is "yes".
If the answer was "no", we would mark it as "Can't send or receive bitcoins" and the following would apply:
The answer is "no". We marked it as "Can't send or receive bitcoins".
We did not ask this question because we failed at a previous question.
If the answer was "no", we would mark it as "Can't send or receive bitcoins" and the following would apply:
If it is for holding BTC but you can’t actually send or receive them with this product then it doesn’t function like a wallet for BTC but you might still be using it to hold your bitcoins with the intention to convert back to fiat when you “cash out”.
All products in this category are custodial and thus funds are at the mercy of the provider.
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.The answer is "yes".
If the answer was "no", we would mark it as "Custodial: The provider holds the keys" and the following would apply:
The answer is "no". We marked it as "Custodial: The provider holds the keys".
We did not ask this question because we failed at a previous question.
If the answer was "no", we would mark it as "Custodial: The provider holds the keys" and the following would apply:
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 answer is "yes".
If the answer was "no", we would mark it as "No source for current release found" and the following would apply:
The answer is "no". We marked it as "No source for current release found".
We did not ask this question because we failed at a previous question.
If the answer was "no", we would mark it as "No source for current release found" and the following would apply:
A wallet that claims to not give the provider the means to steal the users’ funds might actually be lying. In the spirit of “Don’t trust - verify!” you don’t want to take the provider at his word, but trust that people hunting for fame and bug bounties could actually find flaws and back-doors in the wallet so the provider doesn’t dare to put these in.
Back-doors and flaws are frequently found in closed source products but some remain hidden for years. And even in open source security software there might be catastrophic flaws undiscovered for years.
An evil wallet provider would certainly prefer not to publish the code, as hiding it makes audits orders of magnitude harder.
For your security, you thus want the code to be available for review.
If the wallet provider doesn’t share up to date code, our analysis stops there as the wallet could steal your funds at any time, and there is no protection except the provider’s word.
“Up to date” strictly means that any instance of the product being updated without the source code being updated counts as closed source. This puts the burden on the provider to always first release the source code before releasing the product’s update. This paragraph is a clarification to our rules following a little poll.
We are not concerned about the license as long as it allows us to perform our analysis. For a security audit, it is not necessary that the provider allows others to use their code for a competing wallet. You should still prefer actual open source licenses as a competing wallet won’t use the code without giving it careful scrutiny.
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.
Application build test result
App Description from Google Play
Do you want to participate in the decentralized financial market and earn high yields on your crypto? Buy & Sell DeFiChain Assets like e.g. DFI, dBTC, dETH, dTSLA, dNVDA with bank transfers at utmost simplicity and security, uncomplicated via the DFX wallet. This wallet enables you to have full control, since only you hold your private key.
Analysis
We downloaded the app and contacted the developer for some clarifications.
For one, when we tapped the Bitcoin icon, this was the message (Screenshot):
Send ONLY Bitcoin (BTC) to your BTC deposit address shown below or scan the QR code. We will transfer dBTC in your DFX Wallet afterwards
Please click here to complete the KYC process and make a deposit or withdrawal to get your bitcoin address.
Our first question was “Doesn’t this mean that the user will receive dBTC instead of actual BTC?”
Here’s their reply:
If you want to have dBTC by sending BTC to DFX you need to be fully verified. Hence, you have to perform KYC and we need also one Fiat wire transfer (either buy Crypto or sell crypto with FIAT). The amount of the order is not relevant. After these two steps are complete, you can send BTC for receiving dBTC on your DefiChain wallet address.
We followed up with:
Daniel: Just to clarify, this means, it’s not possible to store BTC and send BTC from the app - only dBTC right?
They responded with:
Hi Daniel, > we have several products and apps for several blockchains -see https://dfx.swiss >
- DFX DefiChain App –> https://dfx.swiss/defichain/
- DFX Bitcoin Only App –> it is a fork of the bluewallet with our Fiat on- and > offramp –> https://dfx.swiss/bitcoin/
- DFX MetaMask Exchange –> https://dfx.swiss/exchange/ > all of them are non custodial.
Can a wallet be really non-custodial if a provider requires KYC before providing the private keys?
This is the part that confounds us
In their Terms and Conditions page, they state that:
Before DFX’s financial services can be used, the customer must register via the DFX app or on the payment page. Registration is free of charge and leads to the creation of a user profile after acceptance of the current terms and conditions. In addition, a non-custody wallet is created. DFX has no access to this, only the customer. When a customer registers, the information and documents that the customer must submit to DFX and the maximum amount for which the customer can buy or sell, respectively, stake cryptocurrencies depend on his identification level
The keys are supposedly provided to the user AFTER KYC.
Note that there is a considerable amount of analysis undertaken by this company when it comes to transactions:
This is found in the “Handling of Customer Information Section” of the same Terms page:
Customers acknowledge that DFX may record and analyze all of its customers’ actions on DFX-owned websites, APIs, applications, and other direct marketing campaigns for purposes of security, system monitoring, administration, marketing, and compliance with legal and regulatory requirements. DFX will store this information under appropriate security conditions for a limited period of time. DFX will not disclose personal information to third parties unless DFX is required to do so by law and/or regulation.
Analysis
- The user for this specific wallet may have a supposedly “non-custodial” dBTC wallet after undergoing KYC.
- After KYC, the user then deposits BTC which is then converted to dBTC by DFX
I think Ockham’s razor applies in this case, and the simplest explanation for this, is that it is not a bitcoin wallet.
Tests performed by Daniel Andrei R. Garcia
Do your own research
In addition to reading our analysis, it is important to do your own checks. Before transferring any bitcoin to your wallet, look up reviews for the wallet you want to use. They should be easy to find. If they aren't, that itself is a reason to be extra careful.
<img src="https://walletscrutiny.com/images/social/android/com.defichain.app.dfx.png">
