true, and all of these risks can be minimized with transparency; if the site shows their bankroll at all times as well as proof of funds, investors can see for themselves weather or not the site's investment system is legitimate or not. i believe the lack of this transparency was why dadice decided to halt their investment option as well
Dicebitco.in offered exactly that but it still ended up making its investors lose money. It offered proof of funds and the size of the bankroll was always shown on the upper left corner of the site:
Proof of funds and an already starting bankroll of 3000 7500+ BTCs! Yes, SEVEN thousands five hundred. . Our COLD wallet --> https://blockchain.info/address/19tQNCrmaW6EADfJrtBaRixRkPyVrvb6yk
Just passed 1k+ Bets in less than 3h O_o
Quote from an article on the site's demise:
Quote from: CoinTelegraph
Since the beginning of the authorship of this article, DiceBitco.in owners manl and gerry have stopped responding to users on Bitcointalk and a player, going by the name mateo, has continually placed bets with a near perfect win ratio, emptying the site and stealing the entireity of investor funds.
Link: http://cointelegraph.com/news/112470/dicebitcoin-accused-of-cheating-players
Many others fell from the same thing. Even TF's sites got raped. The only truly safe place for your money is in your own hands.
Coinbase offers insurance, but if you read what they say, if their service was hacked or someone found a way to exploit addresses to wipe them out, insurance would not cover the situation.
It was interesting to see that TF *didn't* have them in cold storage. It was pretty up on security, and even advised everyone else to store theirs in cold storage, and called out the sites that didn't (as well as notifying other site owners about their exploitable security holes). It was just overall a pretty bad situation.