Well I think the problem is that if we take the assumption of "being owned" at face value (and that seems justified by the evidence) then "reducing risk to mana

Well I think the problem is that if we take the assumption of "being owned" at face value (and that seems justified by the evidence) then "reducing risk to management levels" doesn't stop these disastrous events from happening. It only makes it more disastrous once the black swan finally lands in your pond. It seems that the only way for this line of business to be feasible in the long term is for the hot wallet :: total assets ratio to be as low as possible. Your income to build assets is proportional to transaction volume, but so is the required size of the hot wallet. Maybe a massive up-front investment to allow for start-up assets to be suitably large in comparison to hot wallet size... but even then you'd need to be careful not to grow too quickly and to ensure that you proportionally build up your reserves for when your hot wallet gets wiped out. But this means that you have those stored assets that you can't invest elsewhere, so are you even making a profit now? The only way to reduce assets needed is probably some kind of insurance arrangement, but why should the insurance company offer low fees for this with the risk profile we currently see?