Insuring crypto users and platforms is difficult

Crypto insurance providers spend a lot of time deciding whether to offer coverage to a crypto company, but almost none of them offer insurance to individuals, according to insurance and crypto executives interviewed by Cointelegraph. Last year, $3.9 billion was stolen from crypto companies, decentralized finance platforms, and users, a 22% increase from the previous year. Some experts believe that 2023 could be even worse. Raymond Zenkich, president of cryptocurrency insurance firm Evertas, explained that evaluating and analyzing the risks of insuring the assets of a crypto platform is a complicated process that involves crunching 2,000 variables across 20 risk areas. Zenkich added that key management, or whether keys are stored in hot, warm, or cold wallets, is a significant risk factor. After determining the level of storage risk, the firm must look at thousands of business, technology, and operational variables before deciding how much of a premium to charge. However, crypto insurance providers are usually hesitant to insure individuals who don’t hold assets on an exchange, such as through self-custody or other means. This is because it would be challenging for a customer to prove to the insurance provider that they actually lost the crypto and didn’t take it themselves.

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!


Was this article helpful?

93 out of 132 found this helpful

Related articles

    Discover more


    Code Is Law: When Crypto Meets the Legal System

    Industry experts remind us that the law is not to be ignored in the fashion world.


    DeFi Protocols Strengthen Defenses to Counter Curve Liquidation Threat

    They are proactively addressing the potential systemic risk that may arise from Michael Egorov's unstable financial s...


    DeFi hacks continue, but ZK-proof development thrives in Finance Redefined.

    The DeFi ecosystem is thriving with exciting advancements in zero-knowledge-proof scaling solutions.


    AnubisDAO loses 13.5K ETH in rug pull on Tornado Cash.

    'While some investors may feel discouraged as their funds are redirected, there are still a few who maintain optimism...


    After being stolen over 54 million dollars, a dramatic show of hackers seizing power is staged, KyberSwap faces a survival crisis.

    The hacker of KyberSwap proposed a settlement condition of 'gaining complete control and all assets of Kyber company'...


    Lybra Finance, a stablecoin issuer, has launched the Arbitrum testnet as part of its efforts to become more DeFi-friendly.

    Lybra's new companion stablecoin peUSD offers users enhanced compatibility with decentralized finance protocols compa...