[fixermark]

I would imagine there is little stopping someone from forming an insurance company in the BTC space: pay them BTCn a month, and they will ensure you for losses due to fraud for up to BTCx. I believe in previous scandals, some talk was made of doing precisely this (basically constructing an FDIC-equivalent BTC holding structure). There's nothing really stopping someone from setting up an insurance backstop in a non-fiat currency; it's just harder to do than having a government declare "If the whole system tanks, we will magic up a trillion goon-dollars to cover everyone's losses."

Of course, that replaces the issue of technological fraud with insurance fraud (and the technological risk of compromise to the insurance holder itself, though "put all your eggs in one basket and make sure it's the BEST basket" is an old and trusted software engineering paradigm). It actually feels like a way big, stodgy institutions could get into the BTC space if they chose to.