Cryptocurrency theft happens frequently. Just a few days ago, Japan's Coincheck exchange lost about $534 million; last December, NiceHash was stolen with about $63 million; South Korean exchange YouBit also filed for bankruptcy due to the theft.

With the increasing frequency of attacks, exchanges are looking for ways to better protect their own funds, as well as safeguard users' assets.

Some of the larger exchanges decided to independently create emergency funds to cover users’ funds stolen from the attack. For example, Bithumb announced that the establishment of an insurance fund of 450 million US dollars will be used to compensate for user losses.

There are also some exchanges that are looking to purchase cryptocurrency insurance, such as Coinbase, which is providing insurance services for users whose funds are stored in hot wallets. Therefore, some large insurance companies have begun to explore insurance products for digital currencies. For example, American International Group (AIG), Germany's Allianz Group (Allianz), American Chubb Insurance Group (Chubb), Mitsui Sumitomo Insurance and other big-name insurance companies. In addition, XL Catlin will provide insurance with a coverage of up to US$25 million.

But in fact, for insurance companies, there are certain challenges in formulating insurance products for digital currencies.

First, the cryptocurrency market is still in its infancy, and insurance companies lack sufficient analytical data to develop insurance contracts suitable for exchanges. Secondly, due to the different national conditions of different countries, the policies on the encryption industry are also different, so insurance companies need to review whether the specific operations of encryption companies comply with national regulations.

In this regard, Christopher Liu, director of the cyber insurance business of American International Group (AIG), believes that the analysis of data statistics may refer to other industries with similar risk characteristics.

In addition, XL Catlin will review the cryptocurrency company for several months before launching cryptocurrency theft insurance. Such investigations include security, storage processes, business scale, and personnel involved.

In addition, some insurance companies have responded by only providing insurance for cryptocurrencies in "cold wallets", because cryptocurrencies stored in "cold wallets" are less prone to hacking and the risk is relatively low.

(I am Yannan, a reporter from Odaily. I am exploring the real blockchain. Please add WeChat nangua421262 for breaking news and communicating. Please note your name, unit, position and reason.)