Crypto Users Risk Billions: Only 2% Have Insurance Against Hacks

Imagine keeping all your money in a bank with no locks, alarms, or insurance. That's what millions of crypto users are doing right now.

The shocking reality: Less than 2% of money in DeFi (decentralized finance - crypto platforms that let you lend, borrow, and trade without banks) is protected by insurance. This means $7.7 billion has been stolen by hackers since 2020, and victims got nothing back.

In April 2026 alone, hackers stole over $600 million from crypto platforms. The biggest thefts came from Drift and Kelp DAO (organizations run by computer code instead of people).

Why aren't people buying insurance? • Crypto users prefer chasing high returns (yields - the interest you earn) over paying for protection • Insurance in crypto is expensive and complicated • Many insurance providers went bankrupt trying to cover the same risks they insured against

The problem has evolved beyond simple coding errors. Today's hackers use sophisticated methods like: • Phishing (fake websites that steal your passwords) • Private key theft (stealing the digital keys that control your crypto wallet) • Social engineering (tricking people into giving away access)

Experts warn this leaves billions at risk. Traditional insurance companies won't touch crypto, and crypto-native insurance has largely failed. Until this changes, users must choose between potentially high returns and the very real risk of losing everything to hackers.

This is an AI-generated summary. Read the original article at: https://www.coindesk.com/business/2026/05/16/crypto-users-are-choosing-juicy-yields-over-protection-putting-billions-at-risk-of-hacks