Crypto Insurance

[Muzika]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

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[DdmrDdmr]

<...>

Just as a general context, ICOs have turned out to be a scam or a failure for the most:

<...> According to a New Study: 80% of ICOs are Scams, Only 8% Reach an Exchange:

80% of the ICOs were scams from the get-go.
6% failed.  
5% died in the process.
8% manages to reach the exchanges, but only half were successful.
<…>

The above data is not recent, but covers many of the post-hype ICO results.

Insurances play a game of odds. When you insure your house, they stipulate the price based on the chances of each potential element covered by the insurance going wrong, and basically bet against them from happening. The insurance company bets on the fact that a known small percentage of all those insured will incur in some sort of casualty, and therefore, sets the premium price based on those low percentages. Propensity models are created in addition that take into account similar to you type people’s index of incidents, and conform the structure behind the premium price to establish.

Now, even if we omit the fact that ICO tokens are not really tangible assets, whose market values could sway like a madman on a roller-coaster if it ever becomes a market asset with any real value, an insurance company has no way to play the odds game on an ICO with numbers like those shown above. The premium would need to be ridiculous, in the range of your investment at least.

[Slow death]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

it would be very difficult to do, look at the amount of money the ICOs are raising and look at the amount of scam that exists. The insurer would have to repay the money the investors lost and for this to work the ICO creators should pay the insurer, but the creators of the ICOs raise funds from the investors. I do not see how the idea of an insurer for ICOs would work

[Kakmakr]

Why should we help the already greedy insurance industry to get more profits, if we can simply regulate the ICO industry ourselves? We already see an increase in IEOs <Initial Exchange Offerings> and those projects are mostly fully regulated, because exchanges enforce KYC/AML regulations.

So if the people behind these ICOs are properly identified by these regulations, then scams are less likely to occur. We will also see more scammers going to jail and this will discourage scammers to launch scam ICOs/IEOs.  

[shinharu10282016]

Actually, that's a good thing but the problem is, no one in the crypto space would want to go and do that. They can just give back the payments if ever the IEO/ICO fails. That's their job. However, what if the project is not legit? Would they be willing to pay that large amounts just to scam people? Insurance is a big thing. And it also means different perspective for the investors and the managers.

[jack8989]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

that is pretty good. I really support this. We need an organization to sell insurance for this to avoid the fraud of bad guys.
Our crypto market really needs insurance, a decentralized market has a lot of scammers and we are very easy to make a mistake.
I used to invest in the Bitnautic project of Scams and Ingot coins. I'm really angry and still waiting for a solution.

[Theb]

Ever heard the lines “buy at your own risk” or “trade at your own risk”? Well in the world of investment there is no such thing as "compulsory insurance” because we are already warned before buying. Them being an investment vehicle doesn't assure you that their price will be going up they don't dictate where it will go. For scams or fake projects in the other hand the closest thing we can ever get for “insurance” is them being punished by law and a lot of people are already put in justice with this kinds of frauds in the industry.

[peter0425]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

It is a good idea, but who will be the authority to handle those? You mean the project themselves will find a compulsory insurance to handle such thing? I doubt that they will go on that route. Again it boils down to decentralisation, with no third party in between. Perhaps a good regulatory framework is needed, or change the business model of ICO, just saying.

[thehun]

There is no such thing as a "safe investment". If any insurance company were to take such a risk, the premium they would charge would make this option absolutely uninteresting.

What they could do is put down some kind of collateral (a property, shares of a reputable company, etc.) as a guarantee that they won't be scamming anyone.

[timerland]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

Firstly, who will be the enforcer of this "compulsory insurance"? The SEC? Or some other regulatory body? The thing is that, even if you have an enforcer, you can't expect every single initial offering to be registered with them, let alone comply with their rules.

Secondly, why would an initial offering bother to try to raise funds, if they are already able to afford an insurance bill that will probably cost a lot, if they are insuring every single investor that is projected to invest?

And lastly, who will be the insurer? Why would anyone be willing to insure such a risky event, especially when it comes to someone over the internet that you have had no previous knowledge about? Nobody wants to take on the risk, and the verification process will simply be way too hard.

It's simply unfeasible overall.

[AjithBtc]

This can't be achieved, as an user stated, the market is unregulated then who'll be the one to make everything planned and executed. The suggestion from Op is really a good one, but in reality a hard task to get it implemented. The funds can be secured on some escrow who is a trusted person or a team into the same service. If the project gets to be a scam, the funds can be released to the investors.

[marcbitcoins]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

No company will ever initiate this kind of insurance business because it is hard to tell if an certain ICO is a legit or not except if the insurance fees are big then maybe they will engage to this kind of business as they will double their effort to ensure that the project is not a scam. We do not know also if we are ready to pay for our insurance expensive cost as we certainly do not know the future of every ICO if they will be a success or not.

[amrulshare]

implementing insurance in the Iico project will not be as easy as one might imagine, for example in the real world there are several insurance services that use it for personal benefits that can even deceive customers. Most blockchain project investors do not know the true background of the real team, which is the main problem why fraud continues to occur in the ICO scope.

[michellee]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

I think we already have seen the insurance from the exchanges which launch IEO because not all exchanges will launch the project. The exchanges itself needs to be selective to launch the project because it will be related to the exchanges reputations. If the exchanges could launch the good projects, it will give the exchanges a good name, and I think that will attract more member to join with them.

[Kemarit]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

I think we already have seen the insurance from the exchanges which launch IEO because not all exchanges will launch the project. The exchanges itself needs to be selective to launch the project because it will be related to the exchanges reputations. If the exchanges could launch the good projects, it will give the exchanges a good name, and I think that will attract more member to join with them.

And that is why ICO are totally dead right now, while IEO is thriving at the sideline. It is administered by a crypto exchanges, mostly reputable ones. And maybe we can call this a insurance per se, because reputable exchanges won't simply accepts or willing to conduct a IEO in their platform if the project itself is somewhat shady.

And as other have said, who will be in-charge of all of this? There are no single authoritative body that oversee all incoming ICO's, so I don't think this is feasible.

[palle11]

So if ever they want to scam people, people are secured.

Insurance is a serious and legal business backed by the laws of a land to guarantee safety of people's property and investment. Therefore, it is nice for that to happen but it is not yet time because crypto has to be classified as a secured area of investment. So an insurance running can't allow for scam. No point therefore to say that the issue of scam can arise.

[dothebeats]

Due to the heightened risk of ICOs ending up as scams and just money grabs, I don't think insurance companies would even dare enter this market full of shitholes and scammers knowing that they're always betting against the wrong side of the coin. Also, even with the amount of regulations imposed for ICOs, I don't think people will view it differently ever again, knowing that only a few percent of those ICOs actually turned out to be legitimate. We know how insurance companies operate, and of course they wouldn't enter a market wherein they wouldn't gain shit.

[MadeinCoin]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

No company will ever initiate this kind of insurance business because it is hard to tell if an certain ICO is a legit or not except if the insurance fees are big then maybe they will engage to this kind of business as they will double their effort to ensure that the project is not a scam. We do not know also if we are ready to pay for our insurance expensive cost as we certainly do not know the future of every ICO if they will be a success or not.

true, no company would want to insure one's investment. It is like bearing the loss of one's investment, moreover many projects fail, of course if there is indeed a company it will bear a huge burden.
It is better if you are not ready to invest, do not invest, if you invest, you must definitely bear all the risks, because the decision is in yourself.

[yusupjatigumilar]

I think this is very much needed in the world of crypto investment, many investors are afraid to invest in the ICO because they are afraid of being deceived by the projects they follow, if there is insurance that can guarantee the security of investing in the ICO maybe more investors will invest in in crypto.But to create the HL I think there must be strong regulation first from the government.

[goaldigger]

What are your thoughts about having a compulsory insurance when someone wants to do some ICO so that investors are safe and the participants are also safe? So if ever they want to scam people, people are secured.

This is definitely a good idea since ICOs have a very bad image as of now. If this would happen, we would need a third party to hold the insurance fund either its a company, or an escrow. With this, the chances of an ICO to be a scam would be limitted.