That insurance is in case an employee at Bitgo steals your funds. It doesn't protect/insure anything once it is out of their hands though.
What you're stating in your article is false.
You state:
In addition to keeping most of the funds in the cold wallet, we have pushed our security to the maximum level by signing a guarantee agreement for $ 100 million in case of any losses due to system breaches.
This insurance covers:
• Errors committed by employees
• Theft committed by employees
• Hacking
The insurance covers ONLY the funds stored at Bitgo;
What Is Covered ?
The $100 million policy covers digital assets where the private keys are held 100% by BitGo Trust Company or BitGo, Inc. in the event of:
Third-party hacks, copying, or theft of private keys
Insider theft or dishonest acts by BitGo employees or executives
Loss of keys
So if your system is breached, Bitgo won't give your customers a dime as YOUR system is not under their control.
Sorry but if you don't understand this i don't think you can maintain an exchange in the first place.
Also, how do we verify you actually use bitgo for cold storage..? we can't.
I've seen more and more exchanges and services use Bitgo "insurance", and i'm getting slightly annoyed by that as
A. it doesn't cover any/all funds of users.
B. it's completely nontransparent from their part about who their actual customers are.
C. it's completely nontransparent about how much funds from users from exchange X or service X they're actually storing/holding.
Bitgo insurance is actually totally useless if you're intending to do harm to your customers. it doesn't protect your customer from you in any way.
