South Korea’s Hanwha Insurance will start selling insurance policies for money stolen by hacking to cryptocurrency exchanges.
The insurance rate will be based on the risk of hacking and will be calculated by Hanwha and a reinsurance company, in cooperation with the exchange buying the policy, The News Asia reported, quoting a Korean news outlet. The new insurance is developed in cooperation between the Korean Blockchain Association and Hanwha.
Currently, the only type of insurance available to South Korean exchanges is for theft of personal information of their clients. The new product will compensate for stolen digital assets. However, under the current regulations, neither insurance is mandatory.
“We plan to start negotiations with individual exchanges for insurance starting next month,” a representative of Hanwha told the news outlet. “It is not a product that has to be compulsory, but it can be suggested. Providing this insurance will require a tremendous amount of coordination between the insurance companies and the exchanges.”
It is not clear whether the exchanges would be willing to buy the new type of insurance if it is not mandatory, but those who do, will have an interest to tighten up the security of their platforms and wallets.
Yet the news for the new insurance comes against the background of the hacks of several South Korean crypto exchanges this year alone. In June, Bithumb, the second-largest local exchange by volume, lost $32 million. This was actually the second time Bithumb was attacked, after a hack from February 2017, when hackers made off with around $1 million, exploiting user accounts. Also in June, a smaller platform, Coinrail, also got hacked, losing $37 million.
In the largest heist in crypto history in January, Japanese crypto exchange Coincheck lost NEM coins worth $500 million, while a month later hackers stole Nano coins worth $187 million from Italian exchange BitGrail.