[DennisP]

Instead of changing incentives, we could remove the technical ability for services to do this.

One solution is m-of-n transactions, which Bitcoin already implements. Set things up so that any two of three keys can sign a transaction and spend your coins. The online service gets one key, you keep another on your computer, and a third goes in your safe deposit box.

Normally, you spend by signing a transaction from your computer and asking the service to do the same. The service can't spend coins without hacking your computer. If the service goes away, you pull the third key out of your safe deposit.

[kiba]

Which will shift the burden to individuals to secure their safetyboxes and safe, and backup their computers. However, it's a hell lot better than losing everyone's coins in one fell swoop.

[mschuster91]

This protects you from a busted exchange but it does not protect the exchange against fraudulent users or criminals.