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Comment by jtchang | Hacker News Reader

I like this. They are basically making a call to self insure against these types of incidents and paying out of their own coffers. It makes sense since recovering the stolen crypto is near impossible (as designed).

It's funny how everything old is new again. We are just reinventing FDIC insurance for crypto.

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Theoretically every bank was self-insured back in the pre FDIC era... the problem was that some banks didn't actually have the reserves (especially given fractional reserve banking)

FDIC insures your account against bank's overall business collapse. It doesn't insure your personal account against bank robbery of your sepcific account (deceptively named "identity theft").

I don't think you'd get FDIC money back if an attacker got into your account. The bank might cover you if they agree it was their fault, similar to Coinbase.

Not a bad thing, really. It'll be what's needed to win over skeptics.

I mean, they'll more likely just move the goalposts than be won over, but at least they're running out of things to complain about. Between this and the Coinbase card, Coinbase has already tackled the two biggest (valid) critiques of crypto that I hear.

There is a difference between self insured and government insured. At the end of the day I prefer self or market insured so the business itself is on the hook for a breach.

The FDIC is a government agency created after bank runs were common during the Depression. This is much different, nothing has been "reinvented".

After all, crypto is speedrunning 500 years of bad economics...

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