Crypto insurance coverage drops 20% to $130M as hacks drain billions

The crypto industry lost $3.63 billion to hacks over the past 19 months. The insurance safety net meant to catch some of those losses? It’s getting smaller. Active on-chain insurance coverage fell 20.2% from $163.2 million to $130.2 million, according to CoinGecko’s 2026 State of Crypto Security Report released on August 27. That’s a $33 million reduction in available protection during a period when attackers have been busier than ever. The coverage gap is widening fast Five out of nine on-chain insurance protocols that CoinGecko tracks have either shut down or pivoted away from crypto coverage entirely by August 2026. The reasons are predictable: sky-high premiums, difficulty attracting capital providers willing to underwrite the risk, and the uncomfortable math of insuring an asset class that hackers treat like an all-you-can-eat buffet. Cumulative insurance payouts have held steady near $33 million. That figure sounds reasonable until you compare it against the $3.63 billion stolen across 245 incidents between January 2025 and July 2026. Insurance covered roughly 0.9% of total losses. Infrastructure and supply-chain attacks have been the primary weapons of choice, accounting for...