Crypto custody insurance: a big step forward for crypto?

[Aanuoluwatofunmi]

If you're into cryptocurrency and want to earn maximum result from your trading or investment outputs, you will need to learn to do all by yourself and stop allowing others to operate the use of your asset for you when you insure with them, we can get more than they can offer us if we are knowledgeable on how we can make profits while trading or holding our investment with us, i don't think using an insurance service is a good idea for any experience crypto user.

[KryptoBull]

Personally, I'm on the camp that we should not rely on a third party to secure our funds. Sure, insurance companies can manage on their own, but what if the management fuck ups somehow and it makes you lose your money in the end? I've seen some news related to insurance companies going bankrupt due to corruption etc. It is hard to believe crypto insurance is immune from that. Even if we can blame the insurance company or the exchange for choosing such a terrible partner, it doesn't guarantee that we can recover our funds. While it might attract retail investors, I hope it doesn't make everyone forget why they want to use crypto as an alternative to fiat.

Nothing is absolutely safe in this market. Currently, users still leave crypto assets on CEXs and rely entirely on the security capabilities and private funds of CEXs. When there is more participation from insurance companies, in case CEXs are attacked, users still have the opportunity to be compensated for all or part of their assets, meaning that the risk will be reduced, although it cannot be 0. I think this is a good thing for the market in the long run, when users and CEXs can be more confident, invest more, and help the market develop more thanks to large capital flows.

[Dr.Bitcoin_Strange]

Well, insurance in crypto—I don't really know how possible that's going to be. We all know how much of an individual's funds most of these centralized exchanges usually hold for people, and if those big exchanges face any problems relating to bankruptcy, it will be very difficult to get back the funds of evenry uses. Therefore, it is very important to play safe and stand by the old rules of "not your key, not your coin." If, peradventure, an exchange gets hacked and all funds are lost, it will actually take time for the customer to get refunded, if at all they will be refunded, and if such a thing happens, there are people who can just suddenly face health issues like depression or shock leading to heart arrest.That's the reason why I said it is very important to play safe.

[Cryptsafe]

Crypto insurance is a good idea. I believe it will run just as the normal fiat and other insurance do run. This insurance policy should have long kick started but I believe it was as a result of the Crypto market instability and volatility that did not allow the project then coupled with the fact that crypto currency was having lots of challenges in the past with government of various nations finding it very difficult to understand the process involved and other challenges that comes with Crypto activities.

One other thing I was looking at now is the identity of the account holders of any cex that picks interest in this insurance policy. Definitely, if a Crypto exchange indicates interests in the insurance scheme, I believe giving their data to the insurance company would likely be amongst one of the criteria for getting insurance cover and that is one of the things most users of cex do not like.

I believe there is nothing like privacy anymore with centralised exchange because looking at what the lot's of things they get themselves involved, one can not tell that they do not give out data of their users out just for them to be on the safe side not to talk of now that there is a Crypto insurance for cex, do you not think presenting data of their users would be amongst the conditions of they would get the insurance cover.

I do not think that users identity is one of the important parts of the insurance contract. The insurance company only needs to know that the crypto assets of CEXs are stored in a hardware wallet, which is auditable, and that CEXs are willing to pay a periodic fee to get protection in case of a bad event. Thanks to onchain data, the insurance company can track the movements of the CEXs' hardware wallet address. CEXs self-manage that hardware wallet, users are not involved in this hardware wallet, so I believe that all user information will still be kept confidential by CEXs.

Looking at what has been happening in the Crypto space, one would not have no reason not to believe that the government would keep of the Crypto insurance act. They would also come for them once they see that they have started gaining traction in the insurance industry because I believe that is the next wave now that is about taking over the Crypto space.

With respect to identity, we can not tell but the government always have their own ways of interfering with things of this nature. They might like tell the insurance company to get list of account holders of the cex they work with threatening them to comply with their demands and they would have no option than to do so.

[Primo1760]

I would like to know your views on crypto custody insurance:

• Is insurance really important for CEXs and the crypto market?
• Would you trust CEXs more if they used crypto insurance services?
• Which CEX will be on board soonest to insure their users' assets?

Users can use their crypto safely if crypto insurance is enabled. I fully agree in this case that insurance should be introduced very quickly if possible. Insurance is really important for CEX and crypto market which can give people a lot of security and people can continue using their crypto safely. I already trust CEX quite a bit but if they introduce an insurance system I will definitely trust it more. If insurance is introduced then I think Binance Exchange will be the first to come on board. If other coins come too I think Binance exchange will come first.

[KryptoBull]

Users can use their crypto safely if crypto insurance is enabled. I fully agree in this case that insurance should be introduced very quickly if possible. Insurance is really important for CEX and crypto market which can give people a lot of security and people can continue using their crypto safely. I already trust CEX quite a bit but if they introduce an insurance system I will definitely trust it more. If insurance is introduced then I think Binance Exchange will be the first to come on board. If other coins come too I think Binance exchange will come first.

I am using Binance and I also hope that Binance will soon have insurance for its reserves, then Safu can be used to invest in more important things, helping Binance to develop further, especially since Binance has lost 4B USD due to paying fines to the US DOJ.

Currently, everything is still just at the declaration stage of insurance companies, we have not had any updates from CEXs about their real need to access and use these services. I believe that they are researching and finding the best way for CEXs and users, and they also know that users will trust them more when they have one less worry about attacks on CEXs. Proof of reserves is necessary but we have no proof of security against hackers.