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Tokenize Xchange

Latest release: 2.0.9 ( 22nd June 2022 ) 🔍 Last analysed 8th November 2021 . Custodial: The provider holds the keys
0 ★★★★★
0 ratings
2nd February 2020

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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.

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)

External Custodian

According to public information from this provider, they use an external company such as BitGo, Gemini Custody or Coinbase Custody as their custodian. Many of the products listed here do the same.

While this might be a good thing:

  • External Custodians are usually highly specialized in securing assets
  • External Custodians will care about fixing issues with one client, to not lose others
  • External Custodians are usually registered businesses under regulatory oversight
  • External Custodians will try to protect your funds even from your wallet provider: With fraud detection, they will certainly try to avoid the emptying of all users' wallets at once
it also has its down-sides:
  • External Custodians are extra intermediaries: Even when the wallet provider wants to let you use your money, they might turn out to be uncooperative
  • External Custodians holding custody of many wallets are interesting targets for hackers and thieves
  • External Custodians, being publicly registered will not be able to resist if in their jurisdiction rules on the use of Bitcoin get tightened

As External Custodians usually don't publish lists of companies they are working with and past information might be outdated, we have no way of assuring claims by wallet providers to be using their custody solution. Please let us know if you found proof that the provider is being dishonest about their business relation to External Custodians!

App Description

Tokenize is a team that aspires to build the next generation digital currency exchange that supports established and emerging digital currencies.

The app claims to have “top notch security:”

IP whitelisting & 2-Factor authentication available for extra security. Hybrid wallet mechanism & multi-signature strategy to guarantee asset safety.

Additionally:

More than 100,000 clients trust us to handle their money everyday
By employing top-tier providers and implementing the best practices for wallet management and identity verification, Tokenize ensures the security and robustness of its platform to provide users with a peace of mind when trading.

This exchange is more than likely to be custodial.

The Site

The FAQ directly says that Tokenize Xchange provides Custodian Services.

Tokenize Xchange takes pride in keeping all assets safe and secure. Partnering only reputable technology and compliance service providers, we uphold and protect the security integrity of our platform.

We collaborate with Bitgo, the global leader in digital asset financial services, to take further stringent measures to safeguard users protection against fraud and we maintain a multi-signature cold wallet under Bitgo custodial solutions for storage of our user’s digital assets. While Tokenize Xchange controls one of the keys, the other is held by the multi-signature custodian leader Bitgo making the wallet much more secure.

The App

We installed the app. Many features of the app are limited and it is mandatory for users to complete KYC verification during registration.

Verdict

This app is clearly custodial and as a result, is 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.