LocalBitcoinslatest release: 1.0 ( 2nd November 2021 ) last analysed 16th November 2021 Custodial: The provider holds the keys
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Please help us spread the word discussing the risks of centralized custodians with LocalBitcoins 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.
The Analysis ¶
(Analysis from Android review)
Update 2021-10-31: Localbitcoins now officially links to this app.
In a support ticket concerning this app, LocalBitcoins confirmed that it is the official app.
Leo: I want to report fraud: https://play.google.com/store/apps/details?id=com.localbitcoins.app.android is probably a fake app, currently used by more than 10k users. LocalBitcoins: Hi, Leo. Thank you for contacting us. We inform you that it is our app, you can download and user your account through your mobile phone. Let us know if you have any questions. --- Best regards, LocalBitcoins
CAUTION: As of October 21, 2021, there has been no official announcement or a link from the official localbitcoins.com website to the Google Play app. We advise users to take precautionary measures and take due diligence measures.
A fake localbitcoins.com app has been documented in 2015.
BUY & SELL BITCOIN EVERYWHERE - WE SUPPORT
- Over 190 countries.
- Almost all the world’s currencies.
- Over 100 of different payment methods
- We offer a secure Bitcoin Wallet for all of our customers for free.
- You can safely store your Bitcoin in your own personal wallet, send and receive bitcoins.
EASY AND FAST
- Registering an account takes 3 minutes and you are immediately ready to buy your first bitcoins.
- Securely open your LocalBitcoins’ app using password or biometric
- Enable two-factor authentication for extra protection
- If your mobile device is lost or stolen, you can revoke its access from your account
REGULATED BY THE FINNISH FSA
- LocalBitcoins is regulated by the Finnish Financial Supervisory Authority (Finnish FSA).
- We do KYC, follow obligations set by the AMLD5 and do everything to ensure both safe and secure trading for all users across our platform.
Google Play Critical Reviews
★☆☆☆☆ October 5, 2021
According to official website and company employees, LocalBitcoin does NOT have an official app! DO NOT DOWNLOAD! It is a phishing application that is trying to get access to your account by having you activate HMAC authentication for your account.
LocalBitcoins Ltd. October 5, 2021
Hi there! Thank you for the feedback. The LocalBitcoins app is due to be announced officially soon. Please rest assured, although silently launched for initial feedback purposes, you have downloaded the official LocalBitcoins application. We will review our website now and ensure any outdated information is taken down. Br, Jukka at LocalBitcoins
The app seems to point to the correct domain of localbitcoins.com
Registration in the app requires:
- Phone number verification
- Email verification
There is another way to check if this is indeed from the correct publishers. The email verification should come from the right domain. Though, some advanced methods it is possible to spoof the domain in the email message.
The verification email:
SPF: PASS with IP 126.96.36.199
DKIM: ‘PASS’ with domain localbitcoins.com
There are different user tiers with different ID verification requirements.
The app links to localbitcoins.fi which looks exactly like localbitcoins.com
We contacted localbitcoins.com via twitter to verify whether the app found on Google Play is indeed theirs. While most indicators seem to point to a legitimate app, user reviews that describe it as ‘fake’ give one pause.
As we wait for the reply on twitter and regardless of whether the app is the real one or not, there are no indications (such as a private key, seed-phrase or mnemonic) that it is a self-custodial app. Furthermore, the terms of service contain provisions which state:
We have the right to limit, suspend, or terminate your account or access to our Services
This makes the service custodial and the app 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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