There is a risk that part or all of the Trust’s bitcoins could be lost, stolen.

[jehst]

Although the Security System’s design includes various elements, such as redundancy, segregation and cold storage, to minimize the risk of loss, damage and theft, neither the Custodian nor the Sponsor can guarantee that the Security System will prevent such loss, damage or theft, whether caused intentionally, accidentally or by act of God. Access to the Trust’s bitcoins could also be restricted by natural events (such as an earthquake or flood) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust and, consequently, an investment in the Shares.

...

The Shareholders’ limited rights of legal recourse against the Trust, Trustee, Sponsor, Administrator, Trust Agency Service Provider and Custodian and the Trust’s lack of insurance protection expose the Trust and its Shareholders to the risk of loss of the Trust’s bitcoins for which no person is liable.

The Trust will not insure its bitcoins.

[zby]

This is meaningless without the context.

[Meuh6879]

Bitcoin is the Alpha and the Omega.

... and it can buy a coffee if you ask ...

Smart system, no ?  

[jehst]

This is meaningless without the context.

It's very meaningful. This is the reason why the SEC isn't going to approve it. If they approve it and the Winklevoss twins get hacked a week later and everyone loses their money, how will it look?

People will blame the SEC.

It's better to keep the ETF in limbo and never approve it.

[Amph]

so they are not going to accept it, only because of a possible hacking attempt, which may be very well the fault of the exchange, and not because of the nature of bitdcoin

actually it's always their fualt, because nothing is wrong with bitcoin, they want not to blame their own activity, and instead searching for excuse to not adopt bitcoin

they seems to have forgot about the insurance, there is already conbase and xapo offering it...

[rebuilder]

Context: This is from the SEC registration statements for the Winkelvosse's trust.

http://www.sec.gov/Archives/edgar/data/1579346/000119312513393903/d562329ds1a.htm