cryptocoingossip

Hacks, Spams, Theft are common in the crypto world but concerning things is it is on the rise, the main reason behind is the crypto market growth.

Hackers, Scamsters target crypto holders or service companies like crypto exchanges and exploit the weak point to steal the crypto funds.

In the case of fiat money for countering huge losses, different nations have different solutions, but the common one is providing insurance to the bank deposits.

However, the absence of central authority controls still there is no comprehensive viable insurance available for crypto holdings.

Even more frustrating thing is finding service providers offering insurance, so I made the list of different crypto service providers offering insurance to your crypto holdings.

Before jumping to the list as I mentioned there is no insurance policy available that ensures all your crypto holdings in different places are safe, that is why we bifurcate insurance in 3 different types.

#1. Insured Exchanges.

First and easiest choice for anyone to get into the crypto world is to through the exchanges.

Exchanges make the buying, selling or holding of cryptos easy also offering many attractive features like futures and spot trading.

In fact, exchanges hold most of the crypto assets so they become a honeypot for the hackers.

Previous hacking incidents proves exchanges are most vulnerable to hacking attacks.

It raises the concern about your holdings on crypto exchanges are safe in case any hacking or other bad incidents occur.

To make sure all your crypto holdings are safe now many exchanges came forward offering insurance and below is the list of exchanges offering insurance for holdings.

Binance.

Binance is the biggest crypto exchange in the world and they ensure your fund safety by setting up their own insurance plan.

Binance allocates 10% of their total trading fee to the insurance fund.

During the recent attack, Binance used the fund and paid $40 million from the fund.

Coinbase.

Coinbase is one of the most popular exchanges in the world.

To prioritize the security of your funds, all digital currency that they hold online is insured against any physical security breach, cybersecurity breach, or by employee theft.

But the notable point here is Coinbase holds only 2% of customer funds online rest stored offline storage.

Bittrex.

After seeing the hacking attempts on the big exchanges Bittrex, one of the leading crypto exchanges in America, recently insured their digital assets held on cold storage (offline storage).

However; this insurance has a limit up to $300 million including internal and external theft.

Crypto.com.

Crypto.com is not just the exchange it is the pioneering payment and cryptocurrency platform offering wallets, cards and many more.

Recently Crypto.com has gathered a record-breaking $360 million worth of insurance to cover the potential loss of coins stored in special offline vaults.

Gemini.

The US-based and founded by Winklevoss Gemini is the trustworthy exchange platform.

Recently they announced launching their own insurance coverage using Bermuda based Nakamoto LTD which provides a total $200 million in coverage for virtual currency that Gemini holds behalf of customers.

Before launching their own coverage Geminis U.S. dollar funds are FDIC insured up to $250,000.

These are the exchanges offering insurance for your holdings.

The list is small but if any new exchanges offer insurance you’ll see the updates.

The drawback of exchange insurance is, any exchanges on the list are not providing full coverage for your holdings and most funds focus on the size of its liquidity pool.

#2. Insurance Backed Wallets.

At the end of the day, the balance in your crypto wallet only matters.

Especially your holdings in online wallets because they’re more prone to hacks.

So ensuring your crypto funds safety, many wallets started to use the third party crypto-insurance providers.

Coincover.

Started in 2018 Coincover is a #1 brand providing insurance protection for crypto wallets.

They offer deposit protection, crypto key storage and recovery, lost key protection, cryptocurrency wills, theft insurance and accumulation plans for our customers.​​

And regulated by the UK Financial Conduct Authority, backed by venture capital and the Welsh Government Bank, with insurance provided by Lloyds of London members.​​

Their service used by wallets shown in the image below.

#3. Smart Contract Insurance.

Smart Contract made it easy to create crypto assets.

After smart contracts made it easy to create crypto assets, many spam and vulnerable projects came forward harming the users.

The best example is the DAO Hack that wiped out $50 million worth of Ethereum and caused it to split out the entire Etherum network.

To counter these incidents; there are many insurance providers on the market.

Nexus Mutual.

Nexus Mutual is not the company offering coverages for smart contracts. Instead, they use the Ethereum blockchain to allow people from all over the world to share insurance risk without the need for an insurance company.

To use Nexus firstly, you have to join Nexus by buying their own NXM token that allows you to participate in the decentralized autonomous organization. All decisions voted on by members, who incentivized to pay genuine claims.

For now, they only concentrated on risk management of Secure risk and potential bugs in smart contract code.

Opyn.

Nexus only focuses on the technical aspects of a contract, but with Opyn, you get coverage for both financial and technical risk.

Opyn built on Convexity Protocol – a generalized options protocol built on Ethereum offering coverage for DiFi users to protect their deposit.

The platform is a two-sided marketplace designed using put options (oTokens) on the Convexity Protocol. On the other side of the marketplace, Opyn also allows ETH holders to earn meaningful premiums on their ETH holdings by providing insurance.

To get a better understanding of how Opyn works, you can just read their blog.

Conclusion.

As I stated earlier there is no comprehensive viable insurance available on the crypto market, so you have to choose which is the best option for you from the above different insurance sections and suitable platform form that section.

Ok, if you have gotten any useful information from this post, don’t forget to share with your family and friends.

Also, mention which insurance and platforms suit you in comments.