Podcast Summary: THE Bitcoin Podcast Episode: BITCOIN INSURANCE, WRENCH ATTACKS, KIDNAPPING & RANSOM, & INHERITANCE SECURITY | Becca Rubenfeld
Host: Walker America
Guest: Becca Rubenfeld
Release Date: July 7, 2025

1. Introduction to Bitcoin Insurance and Wrench Attacks

Becca Rubenfeld opens the discussion by addressing the escalating threat of wrench attacks targeting Bitcoin holders. A wrench attack typically involves coercing or forcibly extracting Bitcoin from individuals, posing significant risks to self-custodians.

"Ultimately, we determined that the only true solution to a wrench attack is insurance."
— Becca Rubenfeld [00:00]

Becca emphasizes that traditional self-custody methods, whether through multi-institutional custody or a sole custodian, are insufficient against such threats. She illustrates the vulnerability by explaining how adversaries can exploit custodial services under duress.

2. Founding of Anchor Watch and Insurance Solution

Becca recounts the inception of Anchor Watch, the Bitcoin insurance startup she co-founded. The initial idea stemmed from discussions on Clubhouse about the necessity of insured self-custody for Bitcoin holdings.

"The idea of discussing the need for insurance was on Clubhouse."
— Becca Rubenfeld [05:25]

She details the challenges faced in proving Bitcoin holdings to insurers and combating potential fraud. The early development involved creating an attestation system akin to proof of reserves to authenticate users' Bitcoin assets.

3. Collaboration with Lloyd's of London

After initial setbacks with traditional insurers hesitant to underwrite Bitcoin insurance due to fraud concerns, Anchor Watch pivoted towards Lloyd's of London, renowned for insuring unconventional assets.

"Lloyd's was more willing to be neutral in their assessment of any given industry or business."
— Becca Rubenfeld [15:15]

Becca highlights Lloyd's extensive experience and specialized syndicates that understand the complexities of Bitcoin, facilitating the underwriting of significant policies. Anchor Watch became one of only two Lloyd's cover holders globally capable of offering crypto-related insurance to retail customers.

4. Inheritance Protocol and Security Measures

A critical component of Anchor Watch's offering is its Inheritance Protocol, designed to ensure seamless Bitcoin asset transfer in the event of an owner's death. Becca discusses the shortcomings of traditional "treasure map" approaches, where beneficiaries often fail to remember or locate split seed phrases.

"There is nobody who can help you with that."
— Becca Rubenfeld [35:12]

To mitigate this, Anchor Watch employs time-locked smart contracts using Bitcoin's native scripts, allowing for a recovery layer that activates post-conditions such as the policy's expiration. This ensures that Bitcoin assets can be securely transferred to beneficiaries without compromising self-custody principles.

5. Bank Integration and Mortgage Guidance

Becca addresses recent regulatory shifts, notably Fannie Mae and Freddie Mac's guidance to consider cryptocurrency as an asset for mortgage qualifications. This development is pivotal for Bitcoin holders seeking liquidity without selling their assets.

"This is a huge change. It's super beneficial."
— Becca Rubenfeld [91:14]

She critiques the initial requirement for assets to be held in centralized exchanges, advocating for broader acceptance of reputable custodians. Anchor Watch supports private loans secured by Bitcoin, demonstrating how insured custody can facilitate bank confidence in Bitcoin-backed assets.

6. Future of Bitcoin-Denominated Insurance Policies

Currently, Anchor Watch's insurance policies are denominated in fiat currencies, primarily due to regulatory constraints that classify Bitcoin as a non-admitted asset. Becca outlines the challenges and future aspirations to offer Bitcoin-denominated policies, which would align insurance coverage directly with Bitcoin holdings.

"We're advocating... it's a long road."
— Becca Rubenfeld [78:55]

She explains that transitioning to Bitcoin-denominated insurance requires regulatory changes, particularly from bodies like the National Association of Insurance Commissioners (NAIC). Anchor Watch plans to eventually offer such policies by leveraging cryptocurrency reserves and diversifying risk across multiple entities.

7. Kidnapping and Ransom Policies

Expanding their coverage, Anchor Watch introduces Kidnap and Ransom (K&R) insurance, addressing scenarios where individuals are coerced to surrender Bitcoin through threats or actual harm.

"Our K&R policy covers ransom payments."
— Becca Rubenfeld [56:33]

K&R policies differ from standard Bitcoin insurance by covering not just the loss of Bitcoin but also the costs associated with ransom payments and professional hostage negotiation services. This comprehensive approach ensures that victims receive support beyond financial restitution.

8. Conclusion and Future Directions

Becca concludes by outlining Anchor Watch's commitment to enhancing Bitcoin security through innovative insurance solutions and advocating for broader industry acceptance. She emphasizes the company's strategic planning to withstand market fluctuations and its role in fostering a secure Bitcoin ecosystem.

"We're building towards this vision... it's really good for all of us."
— Becca Rubenfeld [95:16]

Additionally, she invites listeners to engage with Anchor Watch for policy inquiries and highlights their meticulous onboarding process, ensuring customers are well-informed and secure.

Notable Quotes with Timestamps

• "The only true solution to a wrench attack is insurance."
  — Becca Rubenfeld [00:00]

• "Lloyd's was more willing to be neutral in their assessment of any given industry or business."
  — Becca Rubenfeld [15:15]

• "There is nobody who can help you with that."
  — Becca Rubenfeld [35:12]

• "This is a huge change. It's super beneficial."
  — Becca Rubenfeld [91:14]

• "We're advocating... it's a long road."
  — Becca Rubenfeld [78:55]

• "Our K&R policy covers ransom payments."
  — Becca Rubenfeld [56:33]

• "We're building towards this vision... it's really good for all of us."
  — Becca Rubenfeld [95:16]

Key Takeaways

• Wrench attacks present a significant threat to Bitcoin holders; traditional self-custody methods are inadequate against such coercion.

• Anchor Watch was founded to bridge the gap between Bitcoin self-custody and the need for insurance, ensuring asset protection against theft and loss.

• Partnership with Lloyd's of London positions Anchor Watch as a pioneer in retail Bitcoin insurance, leveraging Lloyd's expertise in unconventional asset coverage.

• The Inheritance Protocol offers a secure, automated method for transferring Bitcoin assets to beneficiaries, addressing common pitfalls in self-custody inheritance plans.

• Recent regulatory developments by Fannie Mae and Freddie Mac to recognize cryptocurrency as an asset are transformative, enabling Bitcoin holders to leverage their assets for mortgages without liquidation.

• Future plans include developing Bitcoin-denominated insurance policies, contingent on regulatory advancements, enhancing alignment between insurance coverage and Bitcoin value.

• Introduction of Kidnap and Ransom insurance provides comprehensive protection, covering both Bitcoin loss and associated ransom expenses, safeguarding individuals from sophisticated threats.

About Anchor Watch

Anchor Watch specializes in providing insured Bitcoin custody solutions, safeguarding assets against various risks including wrench attacks and unforeseen events like kidnapping. Their innovative use of Bitcoin's native scripts ensures secure, automated asset management and transfer protocols, catering to both individual and institutional clients.

For more information or to inquire about insurance policies, visit anchorwatch.com or contact Becca Rubenfeld directly via email at becca@anchorwatch.com.

This summary provides an overview of the key discussions and insights from the episode featuring Becca Rubenfeld on THE Bitcoin Podcast. For a comprehensive understanding, listening to the full episode is recommended.