Are There Insurance Mechanisms for Funds Held on Custodial Exchanges?
Yes, some custodial exchanges provide insurance for user funds, but the coverage varies significantly. This insurance might cover losses from security breaches or hacks originating from the exchange's side, often up to a certain limit per user.
It is crucial to understand that this insurance typically does not cover losses resulting from a user's own account being compromised. Some exchanges also participate in third-party insurance programs or have dedicated insurance funds to cover potential losses.
Users should always verify the specifics of an exchange's insurance policy.
