Does an Excessively Large Fund Pose a Security Risk to the Exchange?

Yes, an excessively large insurance fund can pose a security risk, as it represents a massive, concentrated pool of assets. This large reserve could become a high-value target for hackers.

Therefore, exchanges must employ extremely robust security measures, including cold storage and multi-signature wallets, to protect the fund's assets. The security of the fund is paramount to the stability of the entire exchange.