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Changecoins

Latest release: 1.2.6 ( 10th February 2022 ) 🔍 Last analysed 11th February 2022 . Custodial: The provider holds the keys
1 thousand
12th May 2020

Jump to verdict 

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 

App Description

We offer a wide spectrum of currencies to trade: Bitcoin, Ethereum, Litecoin, Dash, Tether, Dogecoin and others. When conducting any operations, you can pay with your credit/debit card or use such payment methods as Perfect Money, ADVcash and Privat 24.

It also claims to be a multicurrency wallet.

Custodianship and Termination Clauses in its Terms

Changecoins is odd since it claims in Section 4.4, that it does not have custody services

The company does not have custody services, that is, we do not store crypto assets of Users on balances and deposits. In exceptional circumstances, for example, when it is necessary to carry out the AML / KYC procedure, we can delay the exchange.

They have the power to delete the user account:

In 12.1.

We have the right to cancel all the listed Terms and delete the User’s account, restrict access to the account until the completion of the application and fulfilment of all obligations under the application, as well as registration, including password and login in several situations:

If for certain reasons the Company ceases to provide the Services and notifies the Users at least 3 calendar days by e-mail.

If we believe that the User has violated any of the described Terms without notice. In this case, the account is deleted immediately.

App

We tried the app but when we inputted our email address, it gave an error “An internal server error occurred”.

Verdict

Changecoins may claim that it is not a custodial service. However, it doesn’t provide the private keys and does not mention this anywhere on the site. Absent a way to backup your wallet, the service is more likely to be custodial and the app 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:

Custodial!

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.