Is AnchorUSD a Scam?

[RobertHarpool]

I ran into mention of a DeFi exchange called AnchorUSD that is honoring Flare's Utility Fork. So I went to check them out. They passed first muster, so I started to open an account. But three things happened that make me question there legitimacy. 

1. ID verification was instant. Like, not even minutes. Instant. 

2. To link to your bank account, they want your bank login information! (Uname, Pword, PIN)

3. The deposit address for 'your' XRP wallet is at Coinbase! 

(I did not provide info for 2 or 3.)

Does anyone know anything about AnchorUSD? 

Mahalo

 

Edited September 2, 2020 by RobertHarpool

[Guest]

Any time you post I will listen, no idea what AnchorUSD is.

Post more please.

[richxrp]

31 minutes ago, RobertHarpool said:

I ran into mention of a DeFi exchange called AnchorUSD that is honoring Flare's Utility Fork. So I went to check them out. They passed first muster, so I started to open an account. But three things happened that make me question there legitimacy. 

1. ID verification was instant. Like, not even minutes. Instant. 

2. To link to your bank account, they want your bank login information! (Uname, Pword, PIN)

3. The deposit address for 'your' XRP wallet is at Coinbase! 

(I did not provide info for 2 or 3.)

Does anyone know anything about AnchorUSD? 

Mahalo

 

Item 2 is a huge red flag. 

[Guest]

They also might be able to use whatever address (if you had one - they were guessing Coinbase but would take 'anything you gave them') to reverse the transactions to their wallet: https://cointelegraph.com/news/crypto-project-says-it-can-reverse-transactions-and-recover-accounts-without-private-keys

Edited September 2, 2020 by Guest

[at3n]

3 hours ago, RobertHarpool said:

2. To link to your bank account, they want your bank login information! (Uname, Pword, PIN)

Unfortunately this is actually a legitimate thing that can happen. For example see https://www.trustly.net/ , https://www.youtube.com/watch?v=ibonlEoA0O4. I've seen this offered on legitimate sites. Awful practice.

Of course that doesn't necessarily mean that AnchorUSD is legit. If they don't use a third party to provide such a service, they probably aren't.

 

 

 

4 hours ago, RobertHarpool said:

3. The deposit address for 'your' XRP wallet is at Coinbase! 

Definitely weird, but Coinbase does offer a custody service to institutions, perhaps Coinbase is holding AnchorUSD's assets for them.

Everything combined does make it look suspicious, and I wouldn't risk it myself. But it's possible there is an explanation for everything.

 

2 hours ago, StirCrazy said:

They also might be able to use whatever address (if you had one - they were guessing Coinbase but would take 'anything you gave them') to reverse the transactions to their wallet: https://cointelegraph.com/news/crypto-project-says-it-can-reverse-transactions-and-recover-accounts-without-private-keys

That makes no sense. That article from 2018 is about a specific project which, according to the article, supports reversing transactions done on its own network.

You can't reverse XRP transactions.

[Guest]

4 minutes ago, at3n said:

That makes no sense. That article from 2018 is about a specific project which, according to the article, supports reversing transactions done on its own network.

You can't reverse XRP transactions.

How do you know they were withdrawing XRP?

[RobertHarpool]

@at3n

Thank you for your insights.

I've had banks request that info about other banks so as to allow an API setup (Seeing one bank account's balance on a different bank's webpage.) ... but not in any of my dozens of crypto accounts. 

Their wallet being hosted by Coinbase is possible ... but it isn't difficult at all to setup a Ripple address with varied destination tags. Seems overly tech-lazy given the presentation of their app.  

@StirCrazy I"m certain transactions on the Ripple Network cannot be reversed. As at3n pointed out, the article you cited was about a different network. I'm sorry ... I'm not understanding your follow up comment: "How do you know they were withdrawing XRP?"  Did u mean to say 'weren't reversing'? 

[xrdeeznutz]

On 9/2/2020 at 1:43 PM, RobertHarpool said:

I ran into mention of a DeFi exchange called AnchorUSD that is honoring Flare's Utility Fork. So I went to check them out. They passed first muster, so I started to open an account. But three things happened that make me question there legitimacy. 

1. ID verification was instant. Like, not even minutes. Instant. 

2. To link to your bank account, they want your bank login information! (Uname, Pword, PIN)

3. The deposit address for 'your' XRP wallet is at Coinbase! 

(I did not provide info for 2 or 3.)

Does anyone know anything about AnchorUSD? 

Mahalo

 

Yes, I've been using for months.

IBM, Stellar backed 

[Guest]

On 9/3/2020 at 2:45 PM, RobertHarpool said:

 

@StirCrazy I"m certain transactions on the Ripple Network cannot be reversed. As at3n pointed out, the article you cited was about a different network. I'm sorry ... I'm not understanding your follow up comment: "How do you know they were withdrawing XRP?"  Did u mean to say 'weren't reversing'? 

I thought there was technically (although extremely unlikely) a scenario where bad acting validators can cause a reversal? 

Edited September 4, 2020 by Guest

[at3n]

On 9/3/2020 at 2:00 AM, StirCrazy said:

How do you know they were withdrawing XRP?

I thought we're talking about XRP? But it applies generally to pretty much every cryptocurrency in normal circumstances, it's one of the main selling points 

4 hours ago, StirCrazy said:

I thought there was technically (although extremely unlikely) a scenario where bad acting validators can cause a reversal? 

There would need to be coordination between the vast majority of validators to do such a thing, and also a general community consensus to accept the decision (because each server can decide to ignore other servers that it thinks is breaking the rules). It would also probably destroy the price of XRP in the process, as it would undermine one of its most important principles (immutable transactions). It's such an edge case that it's not a realistic argument for a single transaction like this, and it's certainly outside the control of an individual exchange.

It's not like proof-of-work where there is a built-in procedure that allows history to be rewritten (longest chain wins). There's no mechanism in the XRP Ledger allowing rewriting of transactions, so it would require pretty much all participants to run a modified rippled or to agree to load a modified database, or something else similarly "hacky".

See the below thread from 2017, particularly the posts from Ripple employees. Bear in mind that this was when Ripple ran all the validators and it would have been much easier to roll back the ledger than it would be today.

 

Edited September 5, 2020 by at3n

[RobertHarpool]

FWIW, this is Anchor's response to why they need bank log in details, etc. 

Hi Robert,

Thanks for your message.  We work with multiple infrastructure providers to facilitate a scalable and seamless XRP deposit and withdrawal system.  We have heavily vetted all vendors, as well as the security of the system.

To your question about bank login, we utilize Plaid (a Visa company) for seamless bank authentication.  We never see your bank account credentials.  However, if you prefer, you can link your account via microdeposit verification (you should see this option at the bottom of the Plaid screen).

I hope this helps, but please let me know if I can be of further assistance.

Best,

Team AnchorUSD

[at3n]

On 9/8/2020 at 1:45 AM, RobertHarpool said:

To your question about bank login, we utilize Plaid (a Visa company) for seamless bank authentication.  We never see your bank account credentials.  However, if you prefer, you can link your account via microdeposit verification (you should see this option at the bottom of the Plaid screen).

The first few sections of https://plaid.com/legal/#consumers exposes how Plaid operates. It requires such fundamentally flawed personal security practices, I can't believe that companies get away with basing a business on this.

From the link:

Quote

we collect identifiers and login information required by the provider of your account, such as your username and password, or a security token. In some cases, we also collect your phone number, email address, security questions and answers, and one-time password (OTP) to help verify your identity before connecting your financial accounts.

I don't care if Visa owns you, just... no.     /rant

 

At least it does seem to add to the legitimacy of AnchorUSD though, and if the microdeposit method doesn't require you to give up any credentials, then that's obviously much better to use.

Did you ask about the Coinbase address?

[RobertHarpool]

On 9/9/2020 at 5:37 AM, at3n said:

Did you ask about the Coinbase address?

Yes. No response. 

[jss35646]

@RobertHarpool

Did you open an account with them? How has it been going?

[RobertHarpool]

4 hours ago, jss35646 said:

@RobertHarpool

Did you open an account with them? How has it been going?

My apologies ... I should have come back and shared my full experience. 

Yes, I opened an account with them. I deposited a significant amount of XRP. I collected interest seamlessly. I then withdrew my XRP around Dec 7, prior to the Flare fork, so that I could claim my FLR when/how/where I wanted them. 

I deposited a chunk of USDT at AnchorUSD in early December. They have been paying interest as advertised. 

Their support has been responsive. 

At this time I fully intend to redeposit a portion of my XRP with AnchorUSD at the beginning of the next calendar year (for various tax reasons). 

All has been well.