A major South Korean insurance firm reportedly will start providing cryptocurrency exchanges insurance aimed toward compensating for damages caused by hacking, according to local media. Currently, few crypto exchanges in the country are insured and hacking damages aren't covered.
Introducing Hacking Insurance
A major South Korean insurance firm, Hanwha Insurance, is reportedly introducing a new kind of cyber insurance product this month aimed at providing compensation for hacking damages of domestic crypto exchanges, local media reported this week.
The Asia Times described:
"Cyber insurance, which [crypto] exchanges have joined in the past, is a compensation for the leakage of personal information, but the new product also compensates for the damage caused by hacking."
"Cyber insurance, which [crypto] exchanges have joined in the past, is a compensation for the leakage of personal information, but the new product also compensates for the damage caused by hacking."
Hanwha Insurance was quoted revealing that they “plan to begin negotiations with individual exchanges for insurance from next month.” However, the company added that “even if the exchange desires to join, it'll need much coordination, as the insurance and reinsurance companies need to meet so as to get insurance.”
The publication noted, “exchanges may be reluctant to take out insurance if ample compensation isn't provided or the premium is too high.”
Rising Demand for Hacking Insurance
The demand for insurance coverage for hacking damages has been growing in South Korea since the hack of Bithumb and Coinrail in June.
While Bithumb already has two insurance policies, one with Hyundai Marine & fire insurance Co. and therefore the other with Heungkuk Fire & Marine Insurance Co., CBC News noted that they do not cover hacking damages, adding:
"Bithumb has two cyber comprehensive insurance policies [covering] violation of information maintenance, data loss and theft, cyber threats, and compensation for investor personal information leakage."
"Bithumb has two cyber comprehensive insurance policies [covering] violation of information maintenance, data loss and theft, cyber threats, and compensation for investor personal information leakage."
Few Exchanges are currently Insured
In June, Business korea reported that the Korean Blockchain Association was in talks with Hyundai Marine & fire insurance Co. and Hanwha General Insurance Co. over how to provide insurance coverage for crypto exchanges of any size. The publication detailed:
"The association has been continuously holding negotiations with insurers from April on behalf of its member exchanges. This is because insurance companies are reluctant to accept cryptocurrency exchanges as their policyholders due to their credibility and security issues."
"The association has been continuously holding negotiations with insurers from April on behalf of its member exchanges. This is because insurance companies are reluctant to accept cryptocurrency exchanges as their policyholders due to their credibility and security issues."
The association has 23 members that are crypto exchanges, as well as the country’s largest four. Upbit, Bithumb, Coinone, and Korbit already have insurance but the coverage amounts are low. Consistent with the news outlet, Bithumb is insured up to 6 billion won (~$5.3 million), Upbit up to 5 billion won (~$4.5 million), and the other two exchanges up to 3 billion won (~$2.7 million) each.
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