South Korean Crypto Exchanges Can Now Get Insurance Against Hacking
The hacks and cyber thefts that took place this year have led one South Korean firm to take the concept of cyber-insurance a step forward by offering insurance for money lost by cryptocurrency exchanges.
The South Korean insurance firm goes by the name of Hanwha Insurance, and it promises to cover the expenses associated with hacks.
“We plan to start negotiations with individual exchanges for insurance starting next month. It is not a product that has to be compulsory, but it can be outlined if we discuss how much demand there will be. Even if the exchange wants to join, it will require as much coordination as the insurance and reinsurance companies need to meet in order to get insurance,” a representative from Hanwha Insurance declared for the Asia Time news outlet.
The report also highlights that South Korea’s major exchanges have been quick to get this insurance. These include Bithumb (for $5,3 million), Upbit (for $4,5 million), Coinone and Korbit (for $2,7 million).
Hacks and losses
Cryptocurrency aficionados know that the crypto industry has seen its fair share of crypto hacks. This fact alone acts as one of the biggest detriments for every new potential investor. According to various reports, losses due to crypto-hacks and various types of theft have surpassed $1,73 billion. To put that into perspective, this is more than half of the total losses recorded in 2011.
Hacks are not a new event in South Korea, as both CoinRail and Bithumb fell victim to various attacks. Bithumb suffered a loss of $31 billion during the attack, and it was forced to seize all activity until August 4th by which time it managed to recover over a third of its losses.
This turn of events has led multiple insurance companies to display an evident reluctance towards offering their services to crypto exchanges. However, in June 2018, the Korea Blockchain Association has begun discussions with various insurance firms (including Hanwha) in order to address this.