Lloyd’s of London recently launched an insurance policy to protect cryptocurrency held in hot wallets against hacks. The new crypto-insurance policy aims to protect investor interest.
The policy is created by Lloyd’s syndicate Atrium in collaboration with Coincover. Established in 2018, Coincover is aimed at protecting cryptocurrency and increasing accessibility.
It is reported that Lloyd’s of London’s crypto-insurance policy is worth $128,000. Lloyd’s of London’s Product Innovation Facility (PIF) will back the new policy aimed to provide insurance for crypto investors in the event of a hack.
The new crypto-insurance policy will be supported by a panel of insurers from Lloyd’s of London, including Markel and TMC. Recent hacks in cryptocurrency have encouraged Atrium to create a new crypto-insurance policy. Analysis firm Chainalysis anticipates further development in hacks as crypto hackers are becoming more sophisticated. Chainalysis in its recent report notes that hot wallet attacks were a part of two major exchange hacks last year.
Atrium underwriter Matthew Greaves, told the media, “There is a growing demand for insurance that can protect cryptocurrency as it becomes increasingly popular. It is a testament to Lloyd’s that the market has put together an innovative solution to mitigate these new risks and protect against theft — from physical as well as online vaults — thereby providing customers with peace of mind that their assets are safe.”
Currently, PIF has around SG$267.8 million in shared capacity comprising 27 Lloyd’s managing agents, media reports said. Atrium anticipated that the market necessitates crypto assets to be insured on the back of several cyber attacks.