The Old Mutual, a pan-African insurance provider, communicated to press and customers that it won’t insure “crypto mining equipment”, due to high costs and risks involved and speculative nature. They also commented about others problems around crypto market, like money washing tactics and possible use in cyber crimes. Let’s check it!
Old Mutual, a legacy, pan-African insurance provider, announced it won’t insure equipment employed for cryptocurrency mining, based on an announcement released June 10. The organization cites the cost, risk, and speculative nature of the profession.
Africa contributes under 10 % from the total bitcoin hash rate, based on Bitcoin Magazine. Many advocates for that fledgling industry think strict rules, pricey electricity prices, and mining rig cost tags are stopping it from developing — an issue which will only worsen if miners cannot remove protection on their own gear.
Old Mutual isn’t the first to ban coverage for mining equipment or cost premiums outdoors the achieve of numerous hobbyists. Cryptocurrencies are frequently considered a good thing class having a different risk profile than other kinds of capital, and could carry premiums that reflect that risk.
Following extensive research, plus an in-depth overview of claims from clients which have incurred losses to equipment employed for cryptocurrency mining, Old Mutual stated it’s begun counseling its branches to not insure any companies associated with.
“We have decided to not provide cover this kind of risk because it is quite challenging conduct an effective risk analysis of the unregulated fledgling industry that’s already around the radar of monetary government bodies because of the unfortunate connection to money washing and cyber crime,” stated Old Mutual insurance expert Christelle Colman.
The insurer notes crypto mining operations typically utilize high-cost computers, servers along with other equipment modified to operate heftier application-specific integrated circuit devices that may overload the computer’s central processing units or graphic processing units. In addition, managing a system constantly, which the organization alleges is industry practice, introduces perils of overheating along with other malfunctions.
Read more here