MAX Exchange - Buy BitcoinLatest release: 4.0.0 ( 11th April 2022 ) 🔍 Last analysed 1st 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 ¶
Most exchanges are custodial, but to verify, we tried downloading the app and accessing the website. We downloaded the app, but it labelled our location as prohibited. The same error happened with its website.
The next step we did was to look into its user agreement or terms via TOR browser.
A Digital Currency wallet provided by MAX ExchangeAccount for each Digital Currency available to you(“Digital Currency Wallet”), depending on yourlocation and subject to MAX Exchange’s sole discretion;
Section 4.6 of the same page further elaborates:
(b)to restrict or terminate your access to any or all of the MAX Exchange Services and/or this Site for the purpose of risk control,and to determine the process to settle and return your Digital Currency and Fiat Currency,for example, enabling you to withdraw within a specific period;
Since the platform and app, explicitly states its control of user funds, this is thereby confirmed as custodial and cannot be verified.
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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