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[Blog] Why do CeFi businesses need insurance?

Why do CeFi businesses need insurance?

In recent years, the world of centralized finance (CeFi) has seen explosive growth, with billions of dollars being traded and invested on a daily basis. However, as CeFi businesses become more prominent and their operations become more complex, there are increasing risks and uncertainties that they must navigate. One of the most important ways that CeFi businesses can mitigate these risks is through insurance. In this article, we will explore why insurance is crucial for CeFi businesses.

1. Enhancing compliance awareness for sustainable growth

With increased scrutiny from regulators, investors, and consumers, digital asset companies must prioritize, establish, and demonstrate robust risk management governance and frameworks to achieve sustainable growth.

Purchasing insurance helps satisfy this need and showcases a company’s compliance awareness. 

2. Differentiation from competitors

Insurance not only endorses a company’s internal controls, but it also instills confidence in its security measures among customers. 

By obtaining insurance, businesses can stand out in the market and create added value for their clients. 

Despite the growing demand for insurance, digital asset companies still face challenges due to the limited supply of coverage. The underwriting process is often lengthy and complex, with narrow risk appetites that struggle to adapt to the ever-evolving industry technologies. 

This is precisely why OneInfinity is dedicated to researching and innovating insurance products to address these challenges and provide insurance solutions tailor-made for digital asset companies. 

In short, insurance creates substantial business value for CeFi companies. 

It not only enhances compliance awareness and risk management levels, but it also creates a competitive advantage in a fiercely contested market. 

As an insurance company committed to innovation, we understand the industry’s needs and challenges, and we strive to develop more flexible and efficient insurance solutions to meet client demands and propel the industry’s growth.

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