It could just be that when it rains, it pours. But it’s more likely that after revelations of unexpected fees, some characteristically investigative Bitcoiners took a deeper look at Xapo’s and Circle’s solutions. Some have marveled at how the former “became the most hated company overnight in one picture”, referring to their fee table.
Now it has come to light that the terms and conditions limit their insurance on deposits to $100. Typically, regulated financial institutions insure on the scale of $100k-$1m, though they also operate under a very different economic model.
“In no event will the aggregate liability of Xapo, our licensors, service providers, or subcontractors for any loss or damage that arises out of, or is connected with, any of the occurrences described above exceed, the greater of $100 or the service fees that you paid to us for the service we provide.”
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“IN NO EVENT WILL CIRCLE’S TOTAL LIABILITY TO YOU FOR ALL DAMAGES, LOSSES OR CAUSES OF ACTION EXCEED THE AMOUNT YOU HAVE PAID CIRCLE IN THE LAST SIX (6) MONTHS, OR, IF GREATER, ONE HUNDRED U.S. DOLLARS ($100).”
Some are even unhappy with the non-coverage of loss due to negligence, although such a clause seems reasonable. They posit that if their machine is compromised and credentials stolen, it’s their loss.
This all said, it is understandably rare to find offerings with full-scale insurance, unless you are willing to pay.