Coinmotion: Crypto Investinglatest release: 1.6.0 ( 15th November 2021 ) last analysed 19th 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 ¶
(Analysis from Android review)
Coinmotion is a trading platform and has both mobile and web versions. It is run by a Finnish company, “Prasos Ltd.”
We’re one of the leading cryptocurrency service providers in Europe with users in over 20 countries in Europe. With Coinmotion you can securely store and trade Bitcoin, Litecoin, Ethereum, XRP and Stellar Lumens in an user-friendly app and web platform.
Found in the website homepage:
We have built a service based on years of experience in secure cryptocurrency storage. Coinmotion is certified and regulated by the FIN-FSA payment institution license.
From 5. TERM AND TERMINATION:
The Company may in its sole discretion terminate or suspend your Account or transaction at any time without notice if the Company believes that you have breached this Agreement. Upon such termination or suspension, you will not be entitled to any refund of unused fees.
We tried the app and registered the account. Upon signing in to that, we were informed that we are required to fill up a KYC questionnaire. Along with this notice:
Please acknowledge that failure to respond to the KYC questionnaire in time will require us to freeze some of the Coinmotion functionality for your account until the questionnaire has been completed.
We are not allowed to access the app until we choose the option to fill out the KYC questionnaire. This contained questions such as “Company Details” and asked for a business ID or VAT number.
This is a custodial exchange and therefore, 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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