Insurers shun crypto currencies cover, as Zimbabwean Bitcoin investor risk losing huge
Insurance24
HARARE, Zimbabwean Bitcoin investors who have no insurance cover over the currency risk losing their hard earned cash as over $100 billion was wiped off globally in less than 24 hours last week.
The Reserve Bank of Zimbabwe (RBZ) has warned the public against investing in cryptocurrencies such as Bitcoin, saying those engaging in virtual currency transactions will not have legal protection or recourse in the event that they lost their hard earned money.
Over the last few months as the cash crisis in Zimbabwe continues to persist the appetite for cryptocurrencies, Bitcoin included, has increased 4-fold.
Last year, Zimbabwean cryptocurrency exchange Golix.io announced that from its seemingly ambitious targets of wanting to process $1m worth of transactions in total historic value.
There has been reluctance on a global scale as insurers have shown little interest in offering protection against crypto currency theft, willing to tackle daunting challenges it brings rather than miss out on this volatile and loosely regulated, but rapidly growing business.
So far only a few insurers abroad sell such insurance, including XL Catlin, Chubb, and Mitsui Sumitomo Insurance.
The risks are clear: digital currency investors have already lost billions from dozens of cryptocurrency hacks, technical errors and fraud. Many hacked exchanges later shutter. As cryptocurrencies across the board once again take a hit, Bitcoin is exploring the downside below $8,000.
Bitcoin dropped further to a low of $7,876.69 at 02:30 UTC today and was last seen at $7,995. The world’s largest cryptocurrency by market capitalization has depreciated by 12 percent in the last 24 hours.