“Crypto Insurance” Explained by YouHodler’s Financial Department

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By
Natalie
October 22, 2019
crypto insurance, cryptocurrency liquidity, crypto security, crypto loans, BTC loans

In our daily conversations with YouHodler clients, a common question is “what does YouHodler have for crypto insurance?” This is a great point, seeing as crypto protection is a topic on everyone’s mind these days. So to put this question to rest, YouHodler’s Financial Department will review the platform’s insurance features, dispute resolution process and cryptocurrency liquidity outlook.

$1 million crypto insurance reserve; YouHodler uses best practices for crypto storage

Let’s first firmly address the crypto insurance question. At this time, YouHodler does not have a crypto insurance provider but that could change in the near future. In the meantime, clients can take comfort in the fact we use industry-best practices when it comes to crypto storage. Funds are never stored 100% in hot wallets. Instead, we use a mixture of both hot and cold wallet storage which are secured to protect users funds. 

In addition to best practices for crypto storage, YouHodler has a crypto insurance reserve. Since there are currently no traditional insurance companies supporting platforms in our industry, YouHodler must take care of the matter itself. Hence, we have an insurance reserve of $1 million USD that will cover any loss of client funds. Thankfully, we have never had funds go missing for clients and we will keep it that way. 

Blockchain Association’s dispute resolution as crypto insurance

YouHodler is a proud and official member of the Blockchain Association, the crypto subgroup of the larger Financial Commission. This independent, self-regulatory organization (SRO) and external dispute resolution (EDR) provider ensures all YouHodler customers have an outlet for dispute resolution outside of the YouHodler platform.

If at any time, YouHodler fails to meet a clients expectations, they can submit a complaint to the Association and receive a quick, unbiased and non-binding resolution. This is a unique type of crypto security not many others have and we believe it is an effective form of crypto insurance for YouHodler clients. Fortunately, The Blockchain Association has not received a single complaint from any YouHodler clients yet.

Cryptocurrency liquidity is a form of crypto insurance

Due to the negligent behavior of many exchanges in the past, a rising concern amongst crypto users is that of cryptocurrency liquidity. For example, centralized exchanges and crypto platforms offer minimal liquidity. This comes with a couple of problems:

1) Minimal cryptocurrency liquidity is not good for traders who want to trade across exchanges quickly and easily. 

2) Minimal cryptocurrency liquidity on centralized platforms puts assets and identities at risk of malicious attacks.

At YouHodler, we have relationships with a variety of cross-blockchain exchanges and regional banks that helps to create a liquidity pool on a global scale. Hence, distributing funds to clients in a streamlined and secure form of management is always possible on YouHodler. 

We hope this article helped to answer some of your questions about crypto insurance. If you have anything else to ask, please reach out to our 24/7 support at support@youhodler.com.

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