Insurance Of Crypto Assets - From A Legal Perspective

Nirban Chakraborty, KIIT School of Law

ABSTRACT

There for all intents and purposes are thousands of different types of crypto assets out there – or as you might know them, cryptocurrencies in a subtle way. ‘crypto’, for the most part, means ‘hidden’ or ‘secret’ reflecting the security technology used to record who owns what, and for making payments between users in a fairly major way. But cryptocurrencies aren’t like the cash we carry, which kind of is fairly significant. They particularly exist electronically and use a peer-to-peer system, which is fairly significant. There literally is no pretty central bank or government to generally manage the system or step in if something goes wrong, which is quite significant. Some people find this very appealing because they think they for the most part have much more control over their funds but in reality, there are significant risks, sort of contrary to popular belief. With no banks or fairly central authority protecting you, if your funds are stolen, no one is responsible for helping you mostly get particularly your money back. From 2014 to the beginning of 2018, oil prices didn’t change by pretty much more than 10% in one day unlike the value of Bitcoin which changed significantly – rising by 65% in one day and falling by 25% in another, which particularly is quite significant. It is necessary to essentially ensure crypto assets are like all other assets, demonstrating that cryptocurrencies aren’t like the cash we carry, which is fairly significant.