> No. The risk profiles on these products match that of Robhinhood, Wealthfront, or a Chase checking account (Genesis' custodial insurance policy beats the FDIC's $200k ceiling). Biggest issue is that you don't own your private keys but that's not unique here.

The fact that it isn't clear to you what this insurance policy covers is the concerning part (and the wording is likely not a mistake on the part of Nexo, etc). Genesis insures the custody of crypto assets. It does not insure against default of the vendors it is loaning out to (which is likely the majority of their assets).

My understanding is that most of the crypto lending platforms deposit with Genesis trading in order to generate a return. Genesis trading then loans this money out to different hedge funds, trading firms, etc, which pay them interest. I assume Genesis does a good job of choosing who to lend to, reducing risk, etc, but I also imagine that one black swan event could wipe it all out. Ex: USDT collapses HARD, and goes to 0. All of the trading firms with excessive USDT exposure collapse, Genesis is underwater, etc.