The cybersecurity company Group-IB has recently published a report that evaluates crypto exchanges for the purpose of assessing the related insurance risk, publishing a report involving the major crypto trading platforms.
This report has allowed creating a new form of insurance in collaboration with the insurance brokerage group ASPIS that was developed in the CryptoIns project, with the aim of ensuring the values that are deposited on the exchanges.
The risk assessment allows the definition of the correct insurance premiums.
The formula covers many of the world’s largest exchanges including Kraken, OKEx, Quoine, Huobi, Poloniex, Conbnihood, Bittrex and BitMEX. Insurance is an interesting solution given the growth in hacking episodes suffered by crypto exchanges, which cost 877 million in the first nine months of 2018, while the number of violated accounts related cryptocurrencies rose by 369% between 2016 and 2018.
Group IB’s evaluation system is based on a series of criteria such as the quality of key and password storage, the level of security of customers’ personal data and also the security of the infrastructure.
In addition, the assessment of the testers was also made by conducting attempts to penetrate the websites on the basis of both publicly available news and using social engineering systems to try to limit the problems caused by what is often the weakest element of an entire security infrastructure: human.
These evaluations have made it possible to give an assessment of the overall riskiness and therefore to weigh appropriately the premiums to be asked by those who wish to insure.
The assessment of these premiums has made it possible to evaluate that Kraken is the safest exchange because it is asked for an insurance premium equal to 1.25% against a 1.9% that is asked, on average, to the other exchanges. Of course, there is a maximum for the counter value that can be insured, currently equal to 15 BTC or equivalent.
The cryptocurrency insurance industry is expected to reach $7 billion in 2023.