Image source: Getty Images
Now more than ever, crypto insurance might be exactly what your digital asset portfolio needs.
Key points
- According to blockchain data analysis company, Chainalysis, revenue from crypto scams increased 82% in 2021 to $7.8 billion worth of cryptocurrency stolen from victims.
- The latest Chainalsys crime report found that direct crypto theft grew even more, with roughly $3.2 billion worth of cryptocurrency stolen in 2021 — a 516% increase compared to 2020.
- Since cryptocurrency isn’t considered as legal tender in the U.S., it’s not protected in the same way as other deposits. However, some companies see the opportunity by creating and offering cryptocurrency insurance.
According to the latest cryptocurrency crime report from blockchain data analysis company, Chainalysis, revenue from crypto scams increased 82% in 2021 to $7.8 billion worth of cryptocurrency stolen from victims. Direct crypto theft from individuals grew even more, with roughly $3.2 billion worth of cryptocurrency stolen in 2021 — a 516% increase compared to 2020.
The lack of crypto regulation and lack of recognition of cryptocurrencies as sovereign legal tender prevents it from being insured by the U.S. government under the FDIC like traditional bank deposits.
It was only a matter of time before someone saw this gap and started offering cryptocurrency insurance — and it seems that time is now.
Individuals can get insurance for their cryptocurrency accounts
A company called Crypto Shield recently announced that it was offering an insurance policy for individual investors that covers owners for the loss of digital assets that are held on the following crypto exchanges only: Coinbase, Gemini, Binance U.S. and CoinList. Crypto Shield claims on its website that there were six exchange hacks in 2021 where cybercriminals made off with more than $455 million in stolen crypto, and 62 attacks since 2011 with total losses of more than $60.9 billion.
The insurer’s website claims to cover hacks of exchange wallets and social engineering events caused by hacks to a custodial exchange that holds funds on your behalf, offering coverage upto $1 million equivalent for 50% appreciation of your crypto value. The insurance does not cover third-party hardware and software wallets such as Trezor and Ledger, losses due to user errors, or price drops due to market volatility.
The Crypto Shield plan currently offers coverage for 20 of the most popular cryptos including Bitcoin, Ethereum, Solana, Dogecoin, and Cardano, as well as stablecoins such as USD Coin and Tether. The insurer’s FAQ section of the website states that they are continually evaluating new exchanges and crypto assets to include under their coverage.
Our top crypto play is’t a token – Here’s why
We’ve found one company that’s positioned itself perfectly as a long-term picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others. In fact, you’ve probably used this company’s technology in the past few days, even if you’ve never had an account or even heard of the company before. That’s how prevalent it’s become.
Sign up today for Stock Advisor and get access to our exclusive report where you can get the full scoop on this company and its upside as a long-term investment. Learn more and get started today with a special new member discount.
You can’t pay for crypto insurance premiums using crypto
Since individual asset holdings are unique and different, Crypto Shield does not provide flat-rate pricing but requires prospective policy holders to provide some digital asset details to receive a quote. Ironically, the company does not accept crypto as a payment option for the insurance premiums. It only accepts Visa or Mastercard credit or debit cards.
The site states that claims can be made automatically through the Crypto Shield dashboard for your respective policy. You can get coverage for all coins they service for 12 months and the policy renews annually — following an initial three-day waiting period to sign up.
The service is currently available in the following states:
- California
- Illinois
- Massachusetts
- Michigan
- New Jersey
- New York
- Nevada
- Pennsylvania
- Texas
- Washington
It continues to seek nationwide approval only within the U.S. While the current insurance offerings won’t protect your crypto assets from everything, the peace of mind Crypto Shield provides could prove to be better than nothing.
Buy and sell crypto on an expert picked exchange
There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. And to find the one that’s right for you, you’ll need to decide what features that matter most to you.
To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2021. Check out the list here and get started on your crypto journey, today.