Have you heard about crypto insurance? However, the policies usually don’t cover losses from fluctuations in the crypto market.
Various criminal groups operate in the crypto industry. It is no secret that highly volatile cryptocurrency often makes headlines as the target of multimillion-dollar hacks, leading to investors losing millions.
For example, hackers stole about $615 million from a blockchain project connected to the popular game Axie Infinity. As a reminder, insurance covers damage inflicted by unpredictable events, and cryptocurrency insurance is no different.
As opposed to fiat currencies such as the U.S. dollar or the euro, cryptocurrencies are not backed by governments. Furthermore, there is no protection baked in to stop theft or loss of those funds.
For example, the U.S. Federal Insurance Deposit Corporation (FDIC) protects banks and thrifts from up to $250,000 in losses. Nevertheless, no such protection exists for cryptocurrency.
Why is Crypto Insurance Important?
Cryptocurrency and blockchain businesses face unique risks. The cryptocurrency sector is more likely to be the target of cyberattacks, lawsuits, and reputational harm than most sectors. It is important to consult experts who understand crypto risk and can build a custom crypto insurance policy for your business.
Generally, cryptocurrencies and blockchain technology are still scary to a lot of people. But by getting the right crypto insurance policies for your company, you can give your clients, and yourself peace of mind.
When it comes to protecting your crypto-based business, it is advisable that you should not cut corners. Work with a crypto insurance company with the knowledge and expertise you need.
BitiCodes and customers
Do you know how bitcoin auto trading biticodes.com works? Let’s find out!
First of all, the auto-trading system by BitiCodes implements sophisticated algorithms based on the entry, exit, and stop loss, as well as other rules to maximize profit or achieve pre-set trading goals. Interestingly, BitiCodes is linked to the broker account and trading platform like MetaTrader to execute trading rules.
What’s interesting, the system analyzes technical indicators and executes the trade without the direct involvement of the trader. Likewise, traders have the opportunity to establish specific rules based on the mentioned above technical indicators.
Crypto industry and investors
In order to counter that crypto crime wave, exchanges such as Coinbase and Binance claim to insure the digital funds of investors who are victims of theft. However, that won’t help you if you are forced to give up your passwords and credentials in an extortion scheme.
Several years ago, Binance established the Secured Asset Fund for Users (SAFU) to protect users’ funds, in which it committed a portion of trading funds. In 2019, it lost $40 million in a hack, which the company claimed did not affect investors. Binance says their SAFU paid for the loss.
In order to make up for some of the stolen balance, the fledgling sector of cryptocurrency insurance companies may cover some losses connected with cybersecurity breaches and thefts; however, neither investors nor exchanges will get all their funds back.
What the policies usually don’t cover are the losses from fluctuations in the crypto market or if an investor gets involved in a get-rich-quick scenario that turns out to be a Ponzi scheme, in which all or some of the investment is lost.
Importantly, it also doesn’t cover direct hardware loss and damage and transfer of cryptocurrency to a third party or protects against disruption or failure of the blockchain underlying the asset.
Furthermore, in the event of crypto exchange bankruptcy, insurance is less helpful. Customers with custodial-held assets are last in line to receive any payments. In order to protect your funds, consider a non-custodial wallet for which you own the private keys.
Interesting details about crypto insurers
Companies such as Relm Insurance and Lloyd’s are sliding into the crypto insurance game. You need to remember that some insurers cover only crypto exchanges because that is where the large balances of crypto funds reside.
Even though not an insurance company per se, Coincover does offer an individual protection technology as well as a software solution that attempts to prevent crypto businesses from losing crypto due to theft or human error.
It covers digital assets against hacking, phishing, malware, device theft, Trojan software, as well as brute force attacks. Coincover claims its technology enables the company to compensate for when something goes wrong.
The Ideas Plus Business Editorial team is responsible for this post. For collaborations and partnership requests, kindly send an email to the Editorial Team at ideasplusbusiness[at]gmail[dot]com for the terms and conditions. You can also follow IdeasPlusBusiness.com on Twitter here and like our page on Facebook here.
