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SwissBorg: Invest in Crypto

latest release: 1.22.3 ( 18th August 2021 ) last analysed  27th August 2021 Custodial: The provider holds the keys 
4.3 ★★★★★
7502 ratings
100 thousand
16th June 2020

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Please help us spread the word discussing the risks of centralized custodians with SwissBorg: Invest in Crypto  via their Twitter!

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.

If you find something we should include, you can create an issue or edit this analysis yourself and create a merge request for your changes.

The Analysis 

Swissborg has provided a Youtube tutorial for withdrawing cryptocurrencies from their product.

SwissBorg is a fully licensed cryptocurrency wallet and exchange provider, trusted by over 100,000 users.

Sounds like an exchange. Judging by the wording, this product also functions as a wallet instead of third-party wallet providers.

Your crypto investments are protected by Curv’s MPC technology - the highest grade security available on the market.

On the official website there is some more information about MPC, or Multi-party computation.

Multi-party computation (MPC). Pioneered by Curv, MPC technology does not require a private key to be created, so it cannot be compromised. As a result, single points of failure are eliminated and security is reaffirmed for app users.

MPC works by multiple parties jointly performing mathematical computations without one party ever revealing its secret to the others. Curv has pioneered the use of MPC protocols to create distributed shares (data that’s split into multiple encoded parts). Curv’s independent shares come together to compute a public key and wallet address, which can be used to deposit digital assets.

Found in Terms of Use:

5.14. The Virtual Currency Custodian may store the User’s Virtual Currency by using a combination of hot and cold storage for the purposes of security reasons. You hereby agree and consent that the Virtual Currency Custodian can place your Virtual Currencies in a hot or cold storage solution. You acknowledge and understand that in the event of insolvency of the Virtual Currency Custodian, your Virtual Currencies may be transferred to another interoperable storage solution which shall allow for the storage of your Virtual Currency.

So Swissborg does’t exactly use private keys but it keeps custody of the clients’ funds.

Verdict: Swissborg is custodial and not verifiable.

(dg)

Verdict Explained

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.
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.