KPMG, one of the ‘big four’ accounting firms, has said that reducing thefts from wallets and exchanges is key to opening up cryptocurrency adoption to the masses. In a report seen by Bloomberg, KPMG warned that worldwide adoption will not happen unless institutional clients in particular can be sure that their funds are safe, with retail customers equally as cautious to join the market.
$9.8 Billion Stolen Since 2017
According to Bloomberg, KPMG’s report highlights that $9.8 billion in digital assets have been stolen by hackers since 2017, with “lax security or poorly written code” being the chief culprits.
This is perhaps unsurprising in a world where exchanges or wallet makers do not have to adhere to any standards, made worse by blockchain technology being in many ways still experimental in many ways.
Risk Still Too High for Most Institutions
Despite the risks, some institutional clients have come on board, such as Fidelity Investments, while firms such as Coinbase offer institutional-grade crypto storage. this still hasn’t convinced the vast majority however, according to Sal Ternullo, co-leader of KPMG’s crypto-asset services and report co-author:
Institutional investors especially will not risk owning crypto assets if their value cannot be safeguarded in the same way their cash, stocks and bonds are.
Technically this is possible, as you can print off your Bitcoin wallet onto paper and put it in a bank deposit box, but the risk comes when you want to sell – a poor choice of exchange, a lack of personal computer safety precautions, or just unfortunate timing could see your Bitcoin disappear forever.
Could Insurance Hold the Key?
One answer could be insurance. If a wallet or exchange can offer adequate insurance, then this could give the assurance that bigger clients are looking for.
This is already in evidence, with the Gemini exchange securing insurance against loss or theft back in 2018, while custodial crypto storage solutions provider BitGo announced a $100 million crypto insurance policy with Lloyds of London in February last year.