FIFA WC accepts Bitcoin but is your digital wallet insured for theft?

June 6, 2018 1:00 pm


The Russia FIFA World Cup has a June 14 start date with all eyes on a Saudi-Russian tie.

“The Bitcoin price could be in for a boost as football fans descend on the country,” Forbes reported.

“Some have turned to Bitcoin and cryptocurrencies to pay their way to the Russia World Cup as it was revealed in May that some hotels in Kaliningrad, host to some of the tournament’s games, were accepting Bitcoin as payment while some airlines and travel agents, will be taking the cryptocurrency.”

At the time of publishing, Bitcoin was at $7600+.

However, bitcoin holders are on edge fearing wallet thefts among other heists.

Hackers stole about $530 million worth of cryptocurrency from the Coincheck exchange in Japan this year, one of the biggest such heists ever.

“At its peak at the end of 2017 there were roughly 400,000 Bitcoin transactions per day though this has now fallen back to around 200,000 transactions per day, and fees are back down with it,” Forbes said.

Is there a crypto insurance market on the rise?

Read: Did the UAE have a chance at making the World Cup and blew it?

The UAE has an insurance solution

Regal RA DMCC, a gold investment and trading firm in Dubai, is the first company in the Middle East to receive a license to trade cryptocurrencies, the Dubai Multi Commodities Centre (DMCC)said.

The company said it launched the world’s first “deep cold storage” solution, which allows investors and traders to store their digital currencies – Bitcoin, Ethereum and other altcoins – in a vault located in Dubai’s Almas Tower, the headquarters of free zone DMCC, without connection to a network – alongside the company’s current stock of physical gold.

“We have developed what we believe is the number one most secure way of investing in crypto-commodities,” Tyler Gallagher, chief executive of Regal Assets, which owns Regal RA, said in a statement earlier this year.

Another safe way of dealing with cryptos is to pour it into sound residential projects.

Click: Forget winning the World Cup: Saudi is playing to win big at sports business

The 2.4 million-square-foot Isle of Man-headquartered Knox Group is one example of such firms. The company in September said it will launch a $0.32 billion residential and commercial property project in Dubai, to be purchased in Bitcoin.

But a February survey of Bayut.com found only 3% of those polled by the Dubai property portal were interested in using a digital currency to buy, sell or rent property.

BitOasis.net, a UAE digital currency site offers Multisignature Protection technology to protect client assets adding an extra layer of security, and as protection against fraud, it calls clients to confirm any high risk or large transactions before moving digital assets.

Related: Are you into Bitcoin slalom? There is now treatment for that

Global Crypto insurers

Reuters reported that major global insurers are starting to offer protection against cryptocurrency theft, including XL Catlin, Chubb, and Mitsui Sumitomo Insurance, still a small part of the global $720 billion per year commercial insurance business.

“The risks are clear: digital currency investors have already lost billions from dozens of cryptocurrency hacks, technical errors, and fraud. Many hacked exchanges later shuttered,” said Reuters.

“For insurers, the challenge is how to cover those risks for customers they know little about, who use technology few understand.”

XL Catlin now offers annual crime coverage of up to $25 million per incident.

Read: Bitcoin is here to remind you that it is falling again, losing $18bn in 24hrs

Digital coin sales raised more than $5 billion across nearly 800 deals in 2017, according to venture capital data provider CB Insights, but there are no estimates yet how much of that has been insured or of total premiums collected.

“Annual premiums for $10 million in theft coverage would typically run at about $200,000, or 2 percent of the limit, insurance experts say. That compares with about 1 percent or less for traditional financial clients, depending on the company, loss history, and other factors, reported Reuters.

Bitsonline, an industry site, said The process for obtaining cryptocurrency coverage does not come cheap or without major scrutiny.

“Following Know Your Customer (KYC) or Anti-Money Laundering (AML) procedures will be par for the course when it comes to obtaining a policy for protection,” Bitsonline said.

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Hadi Khatib
By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.



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