Safe Storage of Customer Funds
We take every measure to ensure our customers have a secure storage place for their funds. For this reason, most of our customer funds are stored in a secure multisignature offline storage.
Cryptocurrency wallets can be roughly divided into cold and hot wallets. A cold wallet is a cryptocurrency wallet that is not connected to the Internet, and therefore, it is considered the most secure way to store funds among all wallet types. A hot wallet is constantly connected to the Internet, making it more vulnerable to external attacks.
A multisignature (multisig) wallet, on the other hand, is a cryptocurrency wallet that requires two or more signatures to confirm and send a transaction. This means that no single person can transfer funds alone; the transfer always requires the digital signatures of multiple people.
Bitpanda stores cryptocurrencies acquired through the extended selection of virtual currencies from Coinmotion, marked with an asterisk (*) on our platform, as a subcontractor. We have conducted a comprehensive Due Diligence process in selecting our partner to fulfill our vision as an easy and secure virtual currency service provider.
You can learn more about Bitpanda's security practices in this article: https://www.bitpanda.com/en/security
As a payment service provider and provider of services related to virtual currencies, Coinmotion is required by applicable legislation to keep customer funds separate so that they can be distinguished from the provider's own funds even in the case of insolvency. In other words, we do not use customer funds in our own business; they are completely separated from Coinmotion's own funds. The cryptocurrencies purchased by customers are also securely stored with us and truly exist.
Why Store Funds in Coinmotion?
Coinmotion is a custodial wallet, which means we take care of securely storing customers' funds.
In custodial wallets, the responsibility for storing funds is transferred from the individual to the service provider. You can always manage your funds through your customer account, and if, for some reason, you cannot access your account, you can contact our customer service, and we can restore access to your account. It is beneficial to trust the service provider because the responsibility for storing funds is transferred from the customer to the company, and you can easily regain access to your account anytime and in any situation through customer service.
In a self-hosted wallet, or non-custodial wallet, only the wallet owner has access to the wallet and its funds using a private key. Therefore, the responsibility for storing funds rests with the individual. If the private key is lost, access to the wallet’s funds is irretrievable.
Coinmotion is a company that has been operating in the industry for over 10 years and has extensive expertise in cryptocurrencies and their secure storage. Coinmotion Oy is the first company in Europe to obtain a payment institution license and registration as a virtual currency service provider. The Finnish Financial Supervisory Authority has granted this license and registration to the company, which has passed various audits and security controls to gain these licenses.
Our Vault service provides additional security for storing funds through a time lock. You can learn more about the Vault here.
Two-factor authentication (2FA) significantly complicates misuse attempts because, with 2FA in use, merely having the account’s username and password is not enough to log in and operate the account. More information about 2FA and its setup can be found here.