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.

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