Koinstrap: Buy & Sell BTC, ETHLatest release: 3.0.7 ( 29th April 2022 ) 🔍 Last analysed 22nd November 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 ¶
This app is only available in Nigeria. It claims to allow the buying and selling of cryptocurrency as well as the sending and receiving of it.
There are some reviews that lead us to question if Koinstrap is functioning properly.
★☆☆☆☆ April 19, 2021
Are you guys still functioning ? 🤷
★☆☆☆☆ April 19, 2021
Rubbish app have ever seen,trying verifying my bvn,but it will say unable to verify bvn
★☆☆☆☆ April 19, 2021
I can’t verify my bvn with this application
Termination Clause in Terms
You shall not unlawfully access or attempt to gain access, reverse engineer or otherwise circumvent any security measures that we have applied to our Platform and/or computer system(s). If, at our sole discretion, we were to determine that you are in breach of this clause, we reserve the right to take all action as we see fit, including, without limitation, completely blocking your access to our Platform, blocking and/or revoking your Access Codes and/or terminating your Koinstrap Account.
We were not able to register. Looks like the app is only availabe in Nigeria.
In the FAQ section of their website, they noted that they secure the funds of their users via offline storage:
Is Koinstrap very secured?
We may wish to inform you that all the digital currencies on our website are fully secured and are being stored in an offline vault.
This, along with a termination clause that gives Koinstrap the power to completely block or revoke access to their platform, makes their service custodial. This makes the app non-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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