I believe the system bitfinex was using was put in place because of government regulations they had to meet to be a legal exchange. They couldn't keep the coins in cold storage and use ledgers to move the coins they had to move the coins from account to account to satisfy the regulations. Same would have probably been true of any other coin on the exchange.
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I wonders if that means they'd have some type of insurance on the wallets?
Would make it pretty lucrative for an insider to come in and fill his pocket..!
They should have tried to get insurance. The Lloyds Insurance market in the City of London does all sorts of bespoke insurance for a fee, and other exchanges have obtained insurance this way. Of course they also demand rigorous audits and internal security to reduce their risk, and perhaps Bitfinex believed they couldn't meet the criteria...
I'd like to see an equal-replacement insurance policy for 120,000 bitcoins. It would easily create a new all-time high BTC price!
I think it would still have crashed. Thief dumping lots of BTC, panic selling, and the insurance probably wouldn't pay out until after an investigation and months of paperwork.
I believe they said there was no insurance for that yesterday on reddit.