Our guest on episode 74 of LAB Radio, is InsureYourBit founder and CEO, Doug Moeller. Doug is passionate about providing crypto related insurance to individuals and entities who regularly use uninsured third party custodians as a regular part of their business.
Stay in crypto long enough and you will eventually hear of or be a part of an exchange hack. US based residents who are used to traditional financial services, like banking, are familiar depositors insurance. They receive this as part of the banks agreement with the FDIC. However, the FDIC only insures one kind of deposit, US dollars. Many US based exchanges have FDIC insurance for their customers US dollar deposits, but what about all those crypto deposits?
This is where InsureYourBit comes in. Doug wants to see a world where users, on exchange platforms, are able to purchase their own insurance for their digital assets.
Crypto on an exchange is not insured
Doug’s passion for insurance comes from his experience of platform failure in the crypto space, but also as a poker player on Full Tilt Poker. The similarities of this centralized failure to the crypto exchange failures is eerily synonymous. It also comes from a deep sense of wanting people to be able to protect their assets or provide for their loved ones.
The principles of insurance are to protect people and share risk. Currently, no one offers hot wallet insurance. Exchanges currently have war chests in case they are hacked. However, Doug believes the exchanges could better deploy that capital if it wasn’t all tied up in an emergency fund.
“Insurance is the oldest Coop” – Doug Moeller
In this episode we cover topics like:
- How insurance works
- What it takes to launch an Insurance company
- Regulatory Frameworks
- Smart Contract Insurance
- The types of Crypto they plan to cover
- Insurance “Need vs. Want”
According to a recent survey by InsureYourBit, “64 % of people who hold their crypto outside of an exchange would be more likely to keep it there if there was a crypto insurance product available.”
Lastly, the indemnity to the user will cover the total amount of crypto losses, let’s say Bitcoin in this case. If a trader wants to use and insure 10 bitcoins on X platform, once they start paying their premiums, they are covered in the event of an exchange hack.
Hope you Enjoy!
Further Reading and Resources