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SALT Crypto Loans

latest release: 1.20.41 ( 5th October 2021 ) last analysed  7th October 2021 Custodial: The provider holds the keys 
4.9 ★★★★★
22
7th January 2019

Jump to verdict 

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Please help us spread the word discussing the risks of centralized custodians with SALT Crypto Loans  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 

(Analysis from Android review)

App Description

From Google Play:

SALT offers Crypto-Backed Loans – Cash loans by collateralizing Bitcoin, Ether, Litecoin, Dogecoin, DASH, USDC, TrueUSD and PAX with more options continually added.

SALT isn’t primarily a bitcoin wallet, although it does provide wallet services:

Request crypto asset transfers to or from your SALT cold storage wallet with ease

Personal verification is mandatory:

Valid bank account and social security number/FEIN are required. Borrowing against collateral entails risk and may not be appropriate for your needs.

The Site

On the homepage, we find some information about security.

We recently announced our new custody agnostic approach, which allows us to distribute risk, enhance security, reduce interest rates, fund loans more swiftly, and focus on expanding our suite of wealth preservation products.

Additionally, we find information that says SALT uses multi-sig authorization.

Our custody process and custody partners, like Fireblocks, require multi-user authorization, meaning that access to your assets never hinges on one individual. You can count on us to be available to return your assets.

From the Terms of Use:

Custody Wallet. Eligible users may choose to open a secure, cold storage cryptocurrency custody wallet account (including any replacements, substitution, or sub-accounts, the “Custody Wallet“) through Salt’s subsidiary Salt Platform, LLC, a Delaware limited liability company (“Custodian“). As used herein, Custody Wallet includes any collateral account opened pursuant to a Loan and Security Agreement (a “Loan Agreement“) among yourself, Custodian and a lender; provided, that in the case of any conflict between these terms and a Loan Agreement, the terms of the Loan Agreement shall control.

Also,

All Stored Coins credited to your Custody Wallet shall at all times be controlled by Custodian, subject to any Loan Agreement provisions regarding “control” of the Custody Wallet under the UCC

The App

We tried the app and signed up. We were asked to enter our country and state/province. No mnemonics were provided after signing in. It’s clear that this app is primarily meant for taking out loans and not as a bitcoin wallet, although you can withdraw and deposit bitcoin.

Verdict

This app is custodial and thus 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.