{"id":239228,"date":"2019-10-06T09:25:55","date_gmt":"2019-10-06T13:25:55","guid":{"rendered":"http:\/\/insidebitcoins.com\/?p=239228"},"modified":"2019-10-06T09:25:55","modified_gmt":"2019-10-06T13:25:55","slug":"growing-demand-for-crypto-insurance-pushes-more-companies-to-enter-market","status":"publish","type":"post","link":"https:\/\/insidebitcoins.com\/news\/growing-demand-for-crypto-insurance-pushes-more-companies-to-enter-market","title":{"rendered":"Growing Demand For Crypto Insurance Pushes More Companies To Enter Market"},"content":{"rendered":"
As cryptocurrency use grows around the world, several offshoot industries are coming into being as the digital assets fully develop into a practical financial system.<\/p>\n
The cryptocurrencies themselves have grown faster than the infrastructure that supports them, and many firms are working on building the relevant structures needed to provide full support for cryptocurrency.<\/p>\n
Issues of security have long plagued the crypto industry, and several prospective traders shy away from cryptocurrencies due to fears of losing their holdings to hackers and fraudulent schemes.<\/p>\n
Billions of dollars have been lost to fraudsters who employ crypto assets in their scheme.<\/p>\n
Crypto exchanges, platforms that serve as a storage facility for the coins and a marketplace for traders to exchange their holdings, are targeted by hackers who seek to take advantage of the obscurity that surrounds cryptocurrencies.<\/p>\n
Once crypto holdings have been looted by a hacker, it is next to impossible for the owner or the exchange to trace the stolen assets.<\/p>\n
The cryptocurrency industry has grown to become one of the biggest financial industries across the world.<\/p>\n
The crypto sector has reached a market capitalization of over $200 billion, and this continues to grow as the demand for the asset class increases.<\/p>\n
The size of the market now has led to the demand for crypto insurance from exchanges and traders who fear to lose their holdings to hackers.<\/p>\n
Many big-name insurance providers have entered the fray and have begun offering insurance for cryptocurrency. Lloyd\u2019s of London is one such insurer that has started offering crypto insurance.<\/p>\n
The firm has been in business for over a century and it is worth close to $45 billion. This insurance firm got into a partnership with Coinbase in 2018 and provided the exchange with a $255 million insurance policy.<\/p>\n
The policy came into effect in April this year and Coinbase will be able to cover any losses incurred on its platform.<\/p>\n
Several other crypto exchanges and custodians such as Anchorage, Kingdom Trust, and Gemini have purchased insurance policies of their own.<\/p>\n
Cybersecurity is one of the greatest threats to various industries, and the crypto industry is no exception.<\/p>\n
According to information from CipherTrace, a security research firm, over $4 billion worth of crypto funds have been lost in 2019 alone.<\/p>\n
One of the leading crypto exchanges, Binance<\/a>, reported that it discovered a security breach through which hackers managed to steal 7000 Bitcoins, worth $40 million at the time.<\/p>\n This is one example among several cases of exchanges that have lost funds to hackers.<\/p>\n These hacks seem to be intensifying as time passes. This year alone, there have been at least seven cases of large scale breaches on cryptocurrency exchanges that have been reported.<\/p>\n Insurance would go a long way in giving these exchanges, and their users, a buffer if they fall victim to the loss of funds through hacks. Insurers are slow to enter the market due to regulatory uncertainty around the crypto industry.<\/p>\n Regulators need to develop proper frameworks for the crypto industry, and this will allow more insurers to provide the much needed product for crypto exchanges.<\/p>\n","protected":false},"excerpt":{"rendered":"