Theft from the bank doesn't take money out of anyone's individual account, so individuals don't need to be insured against it. Most bank thefts are small relati

Theft from the bank doesn't take money out of anyone's individual account, so individuals don't need to be insured against it. Most bank thefts are small relative to assets, but if the theft is so large that the bank fails, then the FDIC insurance ensures that customers get repaid. The same is informally true for cryptocurrency exchanges: theft from the exchange's own wallet doesn't directly affect customers unless it causes the exchange to become insolvent. Then the customers will wish they had insurance.