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Latest release: 1.0.75 ( 12th April 2022 ) 🔍 Last analysed 1st October 2021 . Custodial: The provider holds the keys
3.6 ★★★★★
600 ratings
50 thousand
7th July 2020

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.
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.

Help spread awareness for build reproducibility

Please help us spread the word discussing the risks of centralized custodians with BITCLOVER  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 

Updated September 17, 2021 Hotbit has successfully transitioned from hotbit into bitclover. Details here.

From the main page of bitclover

hot-cold server separation, multi-signature card;
Bank-level security through HSM
Use the provided COBO wallet

Centralized exchanges managed by private companies are usually custodial. Since Bitclover has just recently rebranded, they have a new Terms and Service page.

Bitclover.io is a regulated entity and must comply with applicable law. Applicable law, regulation, and executive orders may require Bitclover.io to, upon request by government agencies, freeze withdrawals or trading (or both), or provide information regarding your account.

This is confirmation that this service is custodial.

They also have a structured withdrawal fee page, which is an indication that you could store, receive and send bitcoins from their app.

Verdict is now changed to custodial and thus not verifiable. _____ Old Verdict We viewed the main page of hotbit, and were greeted with this message:

Hotbit Korea Exchange decided that domestic service could no longer be carried out without real-name accounts being secured, so it inevitably decided to terminate domestic service. It will be sold to the global market and transformed into a global service through rebranding as a global exchange. The operating body of the new global service will be Hotbit Global, which will provide better services to members by supporting listing of more diverse stocks and launching new products.

  • Platform rebranding: Hotbit Korea (Hotbit.co.kr) -> Bitclover (bitclover.io)

It was followed by another message:

All digital assets tradable on Hotbit Korea are not fiat currencies. Therefore, there is no guarantee of value, and depending on the circumstances, deposits and withdrawals and transactions may be refused or stopped.

Since digital assets have high volatility compared to general investment assets such as stocks and bonds, there is a possibility of loss of principal due to sudden changes in value.

This centralized exchange is transitioning to another service and therefore another identity. As of today, September 12, 2021, this app is defunct pending its transition to bitclover.io. Bitclover.io still redirects to the original hotbit.co.kr domain.

It would be best to wait until the site service has transitioned to bitclover before opening a new account.

Verdict is defunct.