Cryptocurrency Insurance Is A Growing Sector In The Industry

The growth of cryptocurrencies has been major over the past decade. Since they exist for around 9 years, we can see that cryptocurrencies have had their ups and downs. The latest cryptocurrency news, however, bring a new innovation coming in the form of cryptocurrency insurance.

Knowing that the cryptocurrency market has grown to its current capitalization of more than $200 billion in a relatively short time, the demand for cryptocurrency insurance has always been in place. Already, we can see some big-time insurers emerging as major players in the market.

These include the names of Lloyd’s of London, a centuries-old insurer that is valued at $45 billion, which last year partnered with Coinbase in order to provide a $255 million policy in April this year. Aside from Coinbase, many other custodians adopted a form of cryptocurrency insurance – and some of the examples include Gemini, Kingdom Trust and Anchorage.

Despite the remarkable technology warkehich is backing cryptocurrencies, recent reports show that cybersecurity is still one of the biggest threats to the industry. According to a recent security research report from the firm CipherTrace, more than $4 billion worth of crypto funds was lost through theft and fraud in 2019.

All of this is happening while the BTC news show that the most dominant cryptocurrency is trapped below $8,000. However, cryptocurrency insurance is a sector that is not dependent on Bitcoin.

Last year, for example, Binance announced that it had discovered “a large scale security breach” that resulted in hackers stealing 7,000 Bitcoins worth a whopping $40 million. The exchange noted that the hackers used phishing and viruses to access the hot wallets in the company which contained about 2% of the company’s BTC holdings. In cases like these, cryptocurrency insurance is definitely something that exchanges of Binance’s caliber should have in mind.

All of this suggests that cyber attacks are common in the crypto space and that cryptocurrency insurance may be a good way to deal with them. According to experts such as Hartej Sawhney who is the co-founder of the cybersecurity agency Zokyo Labs:

“There’s an array of low hanging fruits for hackers. You don’t need military training to conduct cybercrime on today’s centralized exchanges.”