bit.comLatest release: 1.0.9 ( 18th May 2022 ) 🔍 Last analysed 3rd 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 ¶
Bit.com comes from the same providers of
This is a trading app:
Bit.com is a secure and high-performance derivative exchange launched by Matrixport, an integrated financial services firm and household name in crypto.
Bit.com offers crypto perpetual swaps and option trading, currently available for BTC, ETH and BCH. Among these, Bitcoin Cash option trading on Bit.com is the first of its kind in the industry.
Bit.com was built with institutional-grade security and risk management features to ensure a superior trading experience leveraging best-in-class liquidity.
What the description says about the app’s security:
Safeguarded by qualified custodian Cactus Custody, global setup and cutting-edge custodian infrastructure.
From the Terms of Agreement - 7.1, Termination:
You acknowledge and agree that BIT.COM shall have the right to limit or suspend your access to the Platform and/or the Website, freeze your Account and/or the Balance if (1) we suspect that you have violated any applicable laws and regulations, these Terms, the Trading Product Rules or other policies, procedures, or rules announced by the Company; (2) we are required to do so by a subpoena, court order, or other government order; (3) the Account is subject to or related to a pending litigation, investigation, and/or governmental proceeding; or (4) we notice and suspect that there are some unusual or unauthorized activities involved with the Account.
You hereby understand and agree that you might be required to provide personal identification information to complete our client onboarding process pursuant to our KYC (“Know Your Client”), AML (“Anti-money laundering”) and CFT (“Counter-terrorist Financing”) programs. We may require such information during your Account registration process and on an on-going basis. You agree to provide us accurate, truthful and complete personal identification information and you agree to notify us when there is any change. Fail to do so may lead to suspension or termination of your Account.
We tried the app and registered an account. Upon signing up, the user is allowed to view the BTC Deposit Address. We can assume that coins can be stored in this app’s “wallet.”
However, we could not find any way to back up the wallets or find any private key.
With no indication whatsoever that this is meant to be a self-custodial wallet, we are compelled to mark this as a custodial wallet. It 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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