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Our $10 million commitment to giving you peace of mind while investing with us

date June 10, 2021 time 5 min read 61 views

Hey folks, 

We believe in making investing as safe for you as possible. 

New investment products pop up all the time and it can be a challenge understanding the precise impact on you should things go awry. Heck, even we get a bit anxious when we enter a new market or investment class!

The truth is, to be a good investor, you have to embrace at least some level of risk. That’s why we spend a lot of time educating you on our products and their associated risks – that way you can make an informed decision about whether to get involved. 

Nevertheless, while risk is inherent to investing, we do our utmost to mitigate it for you. And from today, your investment decisions might be a bit easier as a result of the MyConstant Guarantee, a $10 million mixed-asset fund that backs our products. 

What is the MyConstant Guarantee?

The MyConstant Guarantee is a $10 million fund we’ve set up to compensate you for theft or loss of your assets while under our custody or that of third parties. 

The fund is composed of mixed assets, including cash, crypto, and stablecoins, and is maintained in a separate account to our main operating account. 

Is it an insurance?

No. It also won’t cover the usual risk of investing in crypto-backed lending, such as borrower defaults and the failure of any applicable collateral mechanism. 

However, it does mitigate some of the biggest custodial threats common to investment platforms like ours, including:

  1. Theft or loss of your cryptocurrency while in our custody or that of third parties, and
  2. Theft or loss of your USD or stablecoins while in our custody or that of third parties.

But only when MyConstant or the third-party are at fault

More specifically, the MyConstant Guarantee is designed to protect you from such risks as:

  • Cyber risk. Should an attack on MyConstant servers result in loss or theft of cash or cryptocurrency assets, you’ll be reimbursed some or all of your lost funds.
  • Loss of private keys. Should MyConstant or a third-party lose the private keys to your assets, you’ll be reimbursed some or all of your lost funds. 
  • Custodial risk. Should your cash or cryptocurrency be lost or stolen while in our custody or that of a third party, you’ll be reimbursed some or all of your lost funds. 

It’s not designed to protect you from such risks as:

  • Default risk. Such as when borrowers don’t repay and the collateral mechanism fails (or if there is no collateral such as in Loan Originator investments). 
  • Market risk. Such as the risk of collateral devaluation resulting in a loss to you.
  • Personal security risk. Such as identity theft, theft of 2FA devices, theft of login credentials, and so on where the mitigation of such risk is under your control. 

How does the MyConstant Guarantee work?

To make a claim under the MyConstant Guarantee, just drop us a note as usual under the [email protected] email address. If we discover a problem before you do, we’ll get in touch first. Either way, we’ll need as much information from you as possible. 

Our priority is protecting you and other customers so you must give us time to rectify the underlying issue that resulted in the loss before we process your claim. We understand it’s stressful to lose funds, but we ask for your patience here to protect you and other customers. 

Once the issue has been resolved, we’ll assess the damage and your claim. If possible, and appropriate, we’ll compensate you for your loss up to the $10 million limit. However, several factors might affect the final value of your claim, including (but not limited to):

  • If there are multiple claims.
  • There is no clear assignment of fault. 
  • Market changes that affect the value of the fund.

Also, payments under the MyConstant Guarantee will temporarily diminish the fund until such time as we can replenish it. Combined, these factors might affect whether your claim is paid partially, fully, or not at all.

To avoid disappointment, remember the MyConstant Guarantee has been introduced to offer you greater peace of mind, not eradicate all the risks of investing. The final decision on paying claims from the fund is ours. 

If you’d prefer to have zero risk or an insurance to protect your funds, we ask that you reconsider investing with us. Few platforms are able to offer such protection and you might be better off putting your money in a savings account. 

FAQs

What is the value of the MyConstant Guarantee?

The total fund is valued at $10 million. However, as it’s a mixed-asset fund (comprised of cash and crypto), the value might fluctuate over time due to market conditions. We do our best to maintain the fund at $10 million, but crypto price changes and claims on the fund might temporarily reduce its value. 

How much can I claim against the MyConstant Guarantee?

This depends on the circumstances and severity of your loss, who is at fault, and whether the loss affects other parties. The theoretical limit is $10 million (in aggregate), however, a claim will likely be for less if there are multiple claims on the fund, there is an unclear assignment of fault, market changes have temporarily diluted the value of the fund, and so on. 

What events can I claim for under the MyConstant Guarantee?

The MyConstant Guarantee isn’t an insurance but can be used to compensate you for certain losses, including theft or loss of your assets while in the custody of MyConstant or third parties. You would only qualify for compensation in such circumstances if it was proven conclusively that MyConstant or the third-party were at fault for said loss. 

Does the MyConstant Guarantee cover cybercrime?

Yes, the MyConstant Guarantee can be used to compensate you for theft or loss due to an attempt to hack MyConstant servers, web wallets, or those of our partners. It does not cover cybersecurity incidents over which MyConstant or its partners have no control, for example lost or stolen passwords, sim swaps, identity theft, and so on. 

How do I open a claim under the MyConstant Guarantee?

If you think you’ve suffered a loss that’s covered under the MyConstant Guarantee, please email [email protected]. We’ll investigate your claim and then make a decision. Given the nature of the events that would give rise to a claim, we may be unable to respond immediately until the cause of the event has been identified and resolved. 

Please also respect our right to decline your claim should it not meet the criteria established above or for other reasons we deem appropriate. Online investing involves risk and the MyConstant Guarantee is not an insurance against such risks but a compensatory mechanism we operate at our discretion. 

Why can’t you insure my investments?

You earn a better rate than a savings account because there are risks in lending your assets to other people, regardless of the collateral or other risk mitigation measures underpinning it. 

To insure against these risks would require immense capital, administration, and regulatory costs. We’d have no choice but to pass such costs to you in the form of much lower rates. 

Instead, we give you the choice to assume some risk for a better rate of return. The safest alternative is a CD or other government-backed savings account but the returns are much smaller.

As always, if you have any questions about out $10 million guarantee, give us an give us a call, message us on live chat, or send an email to [email protected]

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Trevor Kraus

Trevor Kraus

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Tags: Security $10 million risk cyber security

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