FORMATION OF RISK MANAGEMENT PARADIGM IN THE FIELD OF CRYPTO INSURANCE
Abstract
The paper considers a relatively new type of insurance – crypto insurance, and also explores the very concept of cryptocurrencies. In the process of multidisciplinary research, it was determined that cryptocurrency is very popular among Ukrainians, as evidenced by many studies. However, the domestic cryptocurrency market is also characterized by risks associated with their use. There are actual problems of the money laundering of illegal proceeds and the terrorism financing. In addition, the factors of financial blockchain technologies influence on the corruption level are systematized and classified according to their impact way such as restrictive, growth and ambiguous. It is determined that the main areas of crypto asset protection are audits, cold storage and insurance. Crypto insurance is a new type of insurance that covers such insured events as hacker attacks, theft and loss of keys, including as a result the employee’s actions. That is why, with the growing popularity of crypto assets, it is extremely important to pay attention to the emerging type of insurance in order to minimize the risks associated with this virtual asset. However, this type of insurance is accompanied by high risks, lack of legislative regulation and market instability, the likelihood of very high losses that hinder its development. Therefore, Ukrainian insurance companies are in no hurry to enter this market. At present, this sector is mainly covered by foreign or international companies. Despite this, the article offers recommendations on the actions of domestic and international insurers to improve the operations related to crypto insurance market. In addition, ways have been identified to improve the performance of both this kinds and insurance at whole using blockchain technology. In particular, it is expedient to implement technologies such as claims management, efficient capital allocation and the use of smart contracts. The introduction of the latest technologies, especially blockchain technology, in the insurance industry helps to minimize material costs and time, significantly simplifies and speeds up the insurance process.
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