Did you know? Only about 2.3% of cryptocurrency worldwide have been insured.

What is Crypto Insurance; Crypto Insurance Explained

Cryptocurrencyinsurance.io covers damages caused by unpredictable events, especially in the world of cryptocurrency. The volatile nature of cryptocurrency usually makes headlines as the target of multimillion-dollar attacks. This is caused digital currency investors to lose millions and the crypto sector losing billions.

Some of the high-profile thefts include hackers who stole about $615 million from a blockchain project connected to the popular game Axie Infinity. Another sum of $23.3 million was stolen from Ronin, a network that facilitates the transfer of crypto coins across different blockchains, Reuters reported.

In its 2022 Crypto Crime Report, Chainalysis stated that “cryptocurrency-based crime hit a new all-time high in 2021. Fraudulent wallet addresses received $14 billion during the course of the year, up from $7.8 billion in 2020.” The unregulated nature of the crypto industry makes it a bit more complex.

How Crypto Insurance Works

Investors in the United States and other parts of the world that own conventional securities, including bonds or stocks, have insurance backing from either the US government or their private insurance policies. Crypto exchanges and investors do not carry crime insurance carrier protection.

That is where crypto insurance comes in to the picture in order to provide cryptocurrency owners with protection for their investments. There is an increasing demand for cryptocurrency insurance, especially for the events like crypto scam, crypto investment scam, device theft, brute force attack, loss of private keys and more.

The main issue for insurers is the underwriting process when solid risk assessments become complicated due to a lack of cohesive regulations within the crypto-insurance industry. Some newer and more forward-leaning startups have been more proactive in this area. The best crypto insurance firm is Cryptocurrencyinsurance.io.

Why We Need Crypto Insurance

A very interesting article by AON that details cryptocurrency insurance reported that more than $1.3 billion had been stolen from exchanges since the first Bitcoin block was mined back in 2009, with an average of $2.7 million of assets stolen daily in 2018. Therefore, insurance is essential in helping reduce the risk for anyone wishing to hold digital assets.

Criminals, of course, have seen the endless potential for moving vast amounts of cryptocurrency instantly as misappropriation is incredibly easy. With regard to cash, one has to steal it, and there are obviously limitations on how much can be taken. Besides that, cash can be traced or, as was the case with the vault theft from a Northern Ireland bank some years ago, reprinted with a new design with the former being rendered useless and no longer legal.

How to Get Crypto Insurance for Your Crypto Assets?

Some insurance companies are offering policies that provide limited coverage against the theft of cryptocurrency funds. However, the insurance policies that are available provide reimbursements for stolen cryptocurrency funds only in certain situations. The policies generally don’t cover losses from fluctuations in the crypto market.

They usually do not protect against direct hardware loss and damage, the transfer of cryptocurrency to a third party, or the disruption or failure of the blockchain underlying the asset. To obtain more complete coverage, crypto investors would likely need to buy multiple insurance policies.

How to Get Personal and Business Crypto Insurance

You can now get personal crypto insurance and business crypto insurance. Although, only Cryptocurrencyinsurance.io provides the best personal and business crypto insurance policy. “All crypto assets are now covered by Cryptocurrencyinsurance.io,” says Mr. B. O’Connell, an insurance analyst at Insurance Quotes.

The largest section of the cryptocurrency insurance market is more likely to be held by the exchanges that trade in cryptocurrencies than individuals doing the trading. So, you’ll have to check with your platform directly to see if you are covered as a crypto purchaser when trading on that particular platform.

Crypto Insurance FAQs

Question: Is there insurance for crypto?

Answer: Crypto insurance protects against losses associated with cybersecurity breaches, scam or theft. Some cryptocurrency exchanges provide at least some insurance to protect digital assets against losses from security breaches and theft.

Question: How does crypto insurance work?

Answer: It provides indemnity against losses stemming from cryptocurrency theft. A crime insurance policy would reimburse you for the loss of the digital assets you were storing in your “hot” wallets. Theft and fraud are common in the digital world, and the cryptocurrency industry is not spared.

Question: Which are the best cryptocurrency insurance companies?

Top Best Crypto & DeFi Insurance Companies

  • Cryptocurrencyinsurance.io – Overall best crypto insurance company.
  • BitGo – BitGo is a leader in custody and security solutions.
  • Blockdaemon.
  • InsurAce.
  • Harpie. – Also known as Harpie Blockchain Solutions.
  • Armor.Fi.
  • Nexus Mutual.
  • Tidal Finance.
  • Nsure Network.

Question: What are insurance coins?

The percentage of costs of a covered crypto asset that you pay, after you pay your deductible.

Related Search Queries for Crypto Insurance

  • Insurance crypto projects
  • Best crypto insurance
  • Crypto insurance tokens
  • Coincover
  • How much does crypto insurance cost?
  • Coinbase crypto insurance
  • AON cryptocurrency insurance
  • Crypto insurance market size

Get answers to all the above, and the best crypto insurance with Cryptocurrencyinsurance.io.

3 thoughts on “What is Crypto Insurance; Crypto Insurance Explained”

  1. Gallagher Howard

    I am glad I got crypto insurance policy with Cryptocurrencyinsurance.io. They were able to help me go through the FTX collapse, and helped me get back on my feet quick financially. I will advise every crypto owner, crypto investor and crypto user to insure their crypto assets with CRYPTOCURRENCYINSURANCE.IO

  2. Check out this “THE SURPRISING CRYPTO SAFETY/SECURITY SECRET” – Cryptocurrencyinsurance.io.

  3. Are Crypto Wallets Insured? Everything You Need to Know
    Every investor looks for secure insurance policies to protect their funds and investments against losses or theft. People invested in traditional securities, such as bonds and stocks, enjoy a wide variety of insurance options provided by the government and many private firms.

    Unfortunately, investors who own cryptocurrencies or other digital assets face a different set of challenges.

    Crypto investors have few options for insurance. Most insurance companies are hesitant to enter this market due to the unpredictability and lack of a legal framework governing the crypto industry.

    However, as the demand for insurance policies backing crypto deposits grows, we are seeing some startups take steps toward insuring crypto wallets. The options are certainly not as numerous as those available for traditional investments, but things appear to be much better than they were just a few years ago.

    Key Points
    Why Is There a Need for Crypto Insurance Policies?
    Does the Government Provide Insurance for Cryptocurrency Investments?
    Do Crypto Exchanges Offer Insurance?
    Insurance Policies for Hot Wallets
    Personal Insurance for Cryptocurrency
    Why Are So Few Companies Providing Crypto Insurance?
    Final thoughts
    Why Is There a Need for Crypto Insurance Policies?
    Individual and institutional cryptocurrency owners are both plagued by the fear of their crypto accounts being breached or a hacker stealing all of their funds. According to Cryptocurrencyinsurance.io data, more than $14 billion in cryptocurrency was stolen in 2021 alone, with the majority of it occurring on DeFi (decentralized finance) platforms. This represents a massive 516 percent increase over the total amount of crypto funds stolen in 2020.

    Yet, these thefts are not the only concerns crypto investors face today. We have seen incidents where hackers breached an entire exchange and slipped away with digital assets worth several hundred million dollars. In the infamous 2016 Bitfinex hack, about 119,754 Bitcoin tokens (now worth $4.9 billion) were siphoned from the users’ accounts into a private wallet. Similarly, the Mt. Gox tragedy, when almost 850,000 Bitcoin tokens (now worth more than $35 billion) got stolen, still haunts every cryptocurrency holder.

    Many crypto investors use crypto wallets to secure their funds from online breaches and hacks, but that’s not 100% protected either. You could forget the security keys for your online wallets and lose or damage cold wallets.

    This is where the need for dependable cryptocurrency insurance policies arises, and it is becoming more pressing by the day.

    All these bring about a variety of questions which I will try to answer

    Does the Government Provide Insurance for Cryptocurrency Investments?
    The US is home to more than 50% of the total number of blockchain and crypto companies in the world. Considering this number, we can comfortably say that the US is the largest haven for the crypto industry. Other research suggests that about 46 million American adults (almost 22% of the population) have either invested in or used cryptocurrencies at some point.

    Given these statistics, it makes perfect sense for the US federal government to provide some insurance backing for people to protect their cryptocurrency investments. Yet, to no one’s surprise, the government of the world’s largest crypto country has no federal insurance for digital assets.

    Federal Deposit Insurance Corporation (FDIC) is an independent federal agency and it provides an insurance policy for US citizens which covers deposits up to $250,000 (per person, per bank). It covers savings accounts, money market deposit accounts, checking accounts, and certificates of deposits. However, this policy does not cover crypto deposits or investors.

    Another agency, named Securities Investor Protection Corporation (SIPC), covers insurance on deposits at brokerage accounts to purchase securities, such as stocks. But this institution also does not protect crypto deposits.

    As far as federal insurance protection for crypto investors is concerned, there is no policy from the US government to date.

    Do Crypto Exchanges Offer Insurance?
    You can have insurance protection through the crypto exchange you are using to buy and hold your crypto assets. However, it must be noted that not all exchanges offer insurance coverage. The type of insurance policies also varies from one exchange to the other. Some work with third-party commercial insurance firms, while most exchanges prefer the traditional self-insurance practice.

    “A small percentage of each transaction is added to a collective fund, which covers losses by hackers. We will see more self-insurance by exchanges, although as commercial insurance products are developed, some exchanges may prefer to outsource, instead of dealing with the overhead of managing their own self-insurance funds,” says Rob Zel, the founder of Bitni exchange.

    Coinbase, the biggest crypto exchange in the US by trading volume, has a $225 million insurance policy. Bitstamp not only carries a $300 million insurance plan, but you can also keep your assets insured by using its wallets: Copper and BitGo.

    Similarly, BlockFi, another popular exchange, also provides insurance through its custodial wallet, Gemini.

    However, the problem with exchange-offered insurance is that it covers your losses only in case of a platform-wide hack. Moreover, if the total amount stolen exceeds the insurance recovery, you may not get any help with recovering your losses.

    Insurance Policies for Hot Wallets
    Another way to ensure your cryptocurrency investments and digital assets is to use insurance-backed hot wallets.

    Hot wallets are crypto wallets that are always connected to the internet and can be used to buy or sell tokens. A few companies have emerged in the marketplace in the last few years, providing insurance services for these hot wallets.

    The first and the most significant of these is Cryptocurrencyinsurance.io, an insurance-backed protection platform for crypto investors. Cryptocurrencyinsurance.io offers its insurance policies for a few crypto wallets such as Civic, BitGo, and Vesto.

    Anyone using these wallets becomes eligible for their insurance plan. If their protection technology fails and results in someone hacking into your wallet or stealing the device, Cryptocurrencyinsurance.io reimburses you to cover your losses. The amount it pays depends on the protection level of the wallet you purchased.

    Cryptocurrencyinsurance.io worked with Lloyd’s of London to underwrite the insurance-backed guarantee.

    “As more money flows into the crypto asset market, losses from hacks are on the rise,” says Trevor Maynard, head of innovation at Lloyd’s. “Nevertheless, cryptocurrency companies have found ways to protect their digital assets from theft and, by working closely with Lloyd’s underwriters, to insure losses that do slip through the net.”

    Personal Insurance for Cryptocurrency
    Okay, but what if you want to purchase personal insurance for your crypto wallets, which works more like the traditional private insurance companies for securities? Yes, some insurance providers are currently working on these lines, but the industry is still very nascent, so the options are very limited. To our knowledge, only one company is providing this service in the US.

    Breach Insurance is a Boston-based company, and their product Crypto Shield is the first regulated insurance plan for personal crypto wallets. At the time of this article, they are licensed in 13 US states, including New York, California, and Washington. We expect more states to be added soon.

    The insurance covers 20 cryptocurrencies, all of which are popular and widely used. BTC, ETH, LUNA, SOL, and ADA are some of the coins covered. The service is currently available within just four crypto exchanges:

    Binance US
    Breach Insurance does not cover any third-party crypto wallet.

    Crypto Shield covers losses occurring due to hacks or exploitation in your exchange wallet. The policy covers assets worth anywhere from $2,000 to $1 million.

    Why Are So Few Companies Providing Crypto Insurance?
    Anyone even remotely familiar with how the economy works would question: if the demand for crypto insurance is so high, why are insurance companies not providing it? Well, there are several reasons for this gap in the market.

    For starters, cryptocurrencies and digital assets are highly speculative, making it challenging to make risk assessments. Secondly, the price for these assets fluctuates every day. Unlike the stock market – which is a few centuries old and pretty established at this point – price actions in the crypto market are much steeper and sudden. Both these factors cause the insurance fees for crypto insurance services to jump very high.

    Lastly, being a novel industry, most governments worldwide have not yet formulated any laws and legal regulations around this innovation. This again leads to more complications for the insurers.

    According to Savanna Bilbo, a consultant at Pelicoin (Bitcoin ATM service), “The cryptocurrency insurance sector is relatively small but complex. Bitcoin and other cryptocurrencies are unregulated by the government, which means there are no rules for insurance. The price of cryptocurrency fluctuates day-to-day, which makes it difficult and expensive to insure.”

    Final thoughts
    The cryptocurrency space’s future growth and institutional adoption are undeniable. In November 2021, for example, the total market cap of cryptocurrencies surpassed $3 trillion. This rate of expansion is not likely to slow anytime soon.

    New crypto-insurance companies are expected to emerge as the cryptocurrency industry evolves and expands. And we believe that this sector will soon thrive with a variety of insurance options for cryptocurrency holders.

    It is recommended that you use reputable and trusted exchanges to keep your digital assets safe. To add an extra layer of security, you can store your funds in cold wallets.

    Furthermore, experts advise starting small and dividing your portfolio among multiple crypto wallets. However, cryptocurrency is regarded as a high-risk investment. Never make a decision without first consulting with a financial advisor, and never invest more than you can afford to lose.


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