Rain: Buy & Sell BitcoinLatest release: 3.0.20 ( 20th October 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 ¶
This service is clearly custodial as described here in its support page about security:
98% of Rain’s cryptocurrency is stored offline in cold-storage at all times, in a safety deposit box in a bank. What this means is that your funds are not on the internet, ensuring hackers have no way to access it.
The app is described as offering services that allow users to buy and sell Bitcoin using fiat from the Middle East. It goes on further:
Rain is the first Middle Eastern cryptocurrency brokerage licensed by the Central Bank of Bahrain (CBB). We currently operate in Bahrain, Saudi Arabia, United Arab Emirates, Kuwait, and Oman. Rain allows you to securely buy, store and sell cryptocurrencies like Bitcoin, Ethereum, Litecoin. You can use your bank account or card to purchase cryptocurrency instantly through Rain.
It describes itself as a licensed custodian
Despite our inability to successfully use and register the app, it is clear that this is a custodial service and therefore, 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 the answer is "no", we mark it as "Custodial: The provider holds the keys".
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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