In Brief:
- OneDegree Hong Kong partners with HKbitEX to offer insurance for cryptocurrencies.
- OneDegree will offer up to US$100 million in coverage to HKbitEX.
The leading multi-line insurance company, OneDegree Hong Kong, announced cooperation with HKbitEX, a well-known and safe digital asset exchange, to provide protection for ON1ON’s custody platform.
OneDegree Hong Kong will be the first insurer established in Asia to provide coverage for digital assets. OneDegree will insure up to US$100 million to HKbitEX, protecting it against theft and hacking of cryptocurrencies placed in its custody by clients.
OneDegree’s chief risk officer, Becky Tam, stated, “based on our research, we expect that globally less than 1% of the companies that are interested in buying cryptocurrency insurance policies would be eligible for such coverage.”
She went on to say that the insurer hoped to share its risk management framework and digital asset underwriting criteria with other industry participants and regulators so that other insurers would feel comfortable selling bitcoin insurance. Insurers will gain from a larger market since they will have additional routes to pass the risk on to other reinsurers, for example.
In the lack of insurance coverage, certain global asset managers and sovereign wealth funds have avoided digital assets due to the danger of hacking and theft. According to many media sources, the Japanese cryptocurrency exchange Liquid was struck by a cyberattack in August that resulted in losses of US$90 million when some of its bitcoin wallets were compromised.
Of course, hacking isn’t the only source of danger for digital asset investors. Gerald Cotten, the co-founder of Canadian cryptocurrency exchange Quadriga, died in December 2018, leaving behind C$190 million (US$142 million) in bitcoin assets, as he was the only person with the private key to the firm’s cryptocurrency wallets.
Although OneDegree does cover theft by workers of the covered organization, it does not cover such risks.
“We are thrilled to collaborate with OneDegree Hong Kong, an insurer licensed by the Insurance Authority. I am confident the additional and reliable protection OneDegree Hong Kong offers can enhance the experience we are bringing to investors in the emerging digital asset space. I also look forward to working further with OneDegree Hong Kong in our common endeavors to assemble key industry players in the form of a think tank to drive knowledge exchange and development in digital assets,” Ken Lo, HKbitEX’s Co-Founder, added.
The firm is developing innovative approaches to provide full protection to digital asset participants. These technologies, in combination with Cymetrics, an in-house enterprise-grade cybersecurity platform, will help companies determine their cyber exposure and manage their cyber risks.
