More than a year ago, an effort began to offer insurance products to companies in the bitcoin space – an intriguing idea at the time given the infancy of the industry and the inability of startups to secure this protection for user funds.
The initiative marked some key early successes – security startup BitGo and wallet service Xapo would go on to acquire insurance by way of those efforts – but at least one of those involved says demand for insurance, particularly bitcoin theft insurance, never fully materialized.
Now, a former president and founder of a business venture dedicated to promoting these insurance products to bitcoin companies is facing serious fraud allegations.
Court documents obtained by CoinDesk allege that Joseph Donnelly, founder and ex-president of Bitcoin Financial Group borrowed $300,000 from Raymond and Suzanne DeBiasa of New Jersey in 2008 to invest the money, but failed to repay the funds.
http://www.coindesk.com/bitcoin-insurance-advisor-founder-securities-fraud/
