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Hong Kong-based cryptocurrency exchange HashKey has taken a step towards bolstering its users’ security by signing a memorandum of understanding (MOU) with fintech firm OneDegree to provide insurance coverage for digital assets held on the platform.<h2 id="header-0">Industry-wide significance</h2>That’s according to a<a href="https://hk.finance.yahoo.com/news/hashkey-exchange-%E8%88%87-oneinfinity-onedegree-093646869.html" rel="noopener noreferrer nofollow"> report</a> in local news media on Wednesday. The move represents a positive development not only for HashKey users, as it extends protection to both hot wallets and cold storage addresses, but for the overall crypto space.After the trail of destruction left by a series of high-profile crypto collapses in 2022, the overarching crypto space has been crying out for adequate solutions that reassure crypto market participants that their funds are safe when placed on centralized crypto platforms. In the traditional banking world, in most jurisdictions there are insurance-based schemes that guarantee a certain percentage or level of depositors funds. In many cases, these schemes are backed by the central government.Asian crypto market participants have been hit harder than most due to these collapses having nothing in place in terms of deposit safeguards. In Singapore, crypto lenders Vauld and Hodlnaut failed, leaving deposit shortfalls. The city-state’s residents were particularly hard hit when it came to FTX as many Singaporeans had opted to use the exchange given that the authorities had banned Binance from trading there.Xiaoqi Weng, the Chief Operating Officer of HashKey, emphasized the company’s commitment to fortifying its financial, technical, and service infrastructure to offer customers comprehensive protection. The goal is not only to enhance user security but also to contribute to the overall development of Hong Kong’s digital asset ecosystem.<h2 id="header-1">Mitigating risk</h2>Yanlin Guo, Co-founder of OneDegree, underscored the importance of establishing a robust framework for cryptocurrencies that includes insurance to identify and mitigate potential risks effectively. This collaboration between HashKey and OneDegree aims to provide added peace of mind to cryptocurrency investors who entrust their assets to the exchange.HashKey achieved a significant<a href="https://medium.com/&#64;coinness.gl/hashkey-report-outlines-risks-of-liquid-staking-fbb0b74d56de" rel="noopener noreferrer nofollow"> milestone</a> on August 3 when it became the first cryptocurrency exchange to receive regulatory licensing from the Hong Kong Securities and Futures Commission, enabling it to offer services to retail investors. Subsequently, on August 28, the exchange<a href="https://medium.com/&#64;coinness.gl/hashkey-gears-up-to-offer-trading-service-to-retail-traders-b4e81ee011f2" rel="noopener noreferrer nofollow"> launched</a> its trading services, albeit with relatively low trading volumes.Currently, HashKey Hong Kong supports the trading of Bitcoin and Ethereum, with no options for margin trading or cryptocurrency derivatives. Nevertheless, the exchange accepts fiat deposits in both US dollars and Hong Kong dollars from authorized financial institutions worldwide.The issue of user insurance has been a contentious topic in the cryptocurrency industry, with various exchanges offering different levels of protection. Some exchanges provide no insurance beyond a contractual claim to users’ assets in the event of bankruptcy. Others offer insurance solely for fiat deposits, while a select few, such as Binance and Bitget, extend coverage to crypto-related incidents.HashKey has answered a market need by integrating this insurance product into its trading service. It’s likely that other platforms will follow suit in the not-too-distant future.

HashKey Enhances User Security with Exchange Insurance Partnership

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