I guess this makes the difference on offering insurance (btw, the amount of insurance funds are actually very small when compare to the total active swaps)
If you think about it, the insurance funds, by their very DEFINITION, cannot be at the same level as the lent funds.
Otherwise, if BFX would have 16 million lying around, they would be smarter to trade or lend them than to insure your funds right?
Also, let's assume in 1 year they have 160 millions lent...how will that be insured?
In the regulated markets, money for margin trading is provided at a cost by the banks to the trading platforms, and that cost is reflected in your spread.
You need to be regulated by the financial authorities though, in order to get such a treatment from the banks as a trading platform. And that ain't gonna happen soon for the BTC exchanges.