What is crypto insurance?
As the name suggests, insurance covers any sort of damage caused by an unpredictable event. Crypto insurance is similar. Cryptocurrencies are highly volatile and many people lose millions of dollars just because of crypto hacks or scams. To avoid this, crypto insurance is made available to people to safeguard their digital holdings.
The insurance companies, however, are providing policies that take into consideration, the limited amount of coverage against the crypto funds. The policies provide reimbursements only under certain circumstances. The loss causing due to fluctuation in the cryptocurrency market, third-party loss, or hardware loss is not taken into consideration. Hence before buying any crypto-insurance, do check their coverage and instructions.
Example
An example of this can be companies like Lloyd’s insurance and Relm insurance. They protect your technology and software from intruders and prevent a crypto technology or business to lose crypto due to human theft or attacks like hacking, phishing, malware, and brute force attacks.
How does Crypto Insurance work?
The working of insurance completely depends on individual companies. For instance, Coinbase crypto insurance is accessible, transparent, and efficient. The working is simple, a network is made for exchanging cryptocurrencies wherein everybody can securely send and receive cryptos in their crypto wallet. Now if any crypto currently is being hacked in this network then the company is supposed to pay a premium to the crypto holder if he/she has taken insurance for the same. The insurance, however, doesn’t pay premiums for the hardware loss or transfer of cryptocurrency to third-party applications.
Also, check our blog on – Top Crypto Scams in 2022 that Shook The Market
Top Companies That Provide Crypto Insurance
Coincover
It provides insurance/ safety solutions for digital assets like crypto. It mainly provides insurance to two types of users, first is for businesses wherein the crypto company future proof to ensure that the data is safe against theft while staying ahead of the regulations. The second is for customers by providing additional security for their crypto funds. It provides a cover of $1 million per wallet.
Funding
As of now, Coincover has raised over $11.6M in funding and has a total of 3 rounds. It is backed by policymakers at Lloyd’s of London.
Coinbase
It is one of the largest crypto exchanges and is based out of the US. this exchange platform provides its users with a crime insurance policy with coverage of up to $255 million according to O’Connell. Coinbase however, won’t cover insurance if there is a data breach on the website.
Funding
They had a total of 18 rounds and the funds raised were about $552.3M in total. After this, Coinbase applied for an IPO and is now listed on NASDAQ. It is backed by Pathward (previously known as MetaBank).
BlockFi
It provides crime insurance/ theft insurance through its primary wallet which is Gemini. It is meant for protecting your funds if you use their wallet, however, there is no guarantee on the coverage.
Funding
They have raised a total of $1.4B and a total of 12 rounds was taken place.
The latest funding that took place was on June 21st, 2022. It is backed by investors like Valar Ventures, Morgan Creek Capital Management, Coinbase Ventures, Galaxy Digital, Susquehanna Government Products, Winklevoss Capital, and more.
Bitstamp
It also provides crime insurance for up to $300 million while wallet assets are also insured such as Copper and BitGo. 95% of its digital assets are stored offline in cold storage which is quite away from the internet and hence cannot be hacked.
The insurance covers 98% of your digital assets.
Funding
They have raised a total sum of $12.4M in 2 rounds of fundraising. In 2018, Bitstamp was acquired by NXMH, a Belgium-based investment company.
Bitgo
Bitgo enables institutions to park their funds safely and stake on their platform.
They also provide digital asset insurance coverage for institutions. Pillow fund has a tie-up with Bitgo. It provides protection of assets for up to $100M per customer.
Funding
A total of $69.5M was raised over funding of 6 rounds. It is backed by Goldman Sachs, Craft Ventures, Digital Currency Group, DRW, Galaxy Digital Ventures, Redpoint Ventures, and Valor Equity Partners.
dRisk
It provides customers with instant claims on their insurance and has incredible pricing. They support live chat in case of an inquiry. The insurance is provided for top currencies like Bitcoin, Ethereum, Solana, etc. Users can also import their trades from the crypto platform. Soon customers might buy insurance from dRisk from their crypto platform itself. For buying insurance, all you need to do is select the validity of your cover and accordingly buy the insurance. It has tie-ups with Wazirx and Binance.
Funding
The funding type was a seed and a total of $2.8M was raised in this round. It is backed by PointOne Capital, Thomas Fecker Boxler, and other crypto platforms, etc.
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