Crypto Exchanges are finding it Hard to buy Insurance

At present cryptocurrency exchanges are having a difficult time gaining an insurance policy because of security problems and countless cyberheists
27 June 2018   339

As claimed by Business Korea, cryptocurrency exchanges are now in negotiations with insurance firms. The Korean Blockchain Association is having a conversation with Hyundai Marine & Fire Insurance Co. and Hanwha General Insurance Co. in order to understand how crypto exchanges can take out an insurance policy. The Korean Blockchain Association has been conducting the negotiations on behalf of their member cryptocurrency exchanges since April 2018. The Association aimed to choose a definite insurer that its members can acquire insurance from. Insurance firms have been extremely reluctant and hesitant to insure cryptocurrency exchanges because of security issues and insufficient credibility.

Firstly, the association considered it an excellent possibility for both parties if one insurer could secure many cryptocurrency exchanges in one go. They initially hosted an event to brief insurance firms and let the members to select their preferred insurer. After the Bithumb hack happened recently, insurance companies have become more unwilling and uncooperative, especially since the damages were worth approximately $31.46 million.

The Korea Blockchain Association emphasized a stronger internal control system and security at the earlier sessions. But we cannot trust it as even the largest cryptocurrency exchange in South Korea was exposed to cyber attacks. There are no statistics related to the risks of virtual currencies both at home and abroad and it is still not sure whether an insurer can accept exchanges as its policyholders as a group, which are smaller and riskier than Bithumb.
Official
The Korean Blockchain Association

Business Korea proposed that insurance organizations could compensate their risk by working with reinsurance companies, the structures that provide insurance for insurers, when the insurance companies decide choose not to work with crypto exchanges. The problem is reinsurance companies might not decide to insure the insurance firm if they cannot trust the level of security from cryptocurrency exchanges.

When insurance companies can increase premiums for cryptocurrency exchanges and enforce greater security measures, the question is, how efficient are the insurances? The present limit of liabilities when it comes to insurance for crypto exchanges is approximately $2.7 million to $4.49 million. Reuters informed in February 2018 that many insurers were not yet convinced the cryptocurrency industry would be large enough for premiums to cover potential losses. According to CoinMarketCap, the cryptocurrency industry’s total market capitalization was approximately $500 billion.

Ex S&P President to Invest in iComply Startup

The startup is aimed at developing tools and services to meet the regulative standards for blockchain start-ups
14 August 2018   121

Startup iComply, working in the field of regulatory technologies and compliance with standards, has just completed the initial round of financing, which was headed by former Standard & Poor CEO Deven Sharma, CoinDesk reports.

IComply, aimed at developing tools and services to meet the regulative standards for blockchain start-ups (especially for those that conduct ICO), said on Monday that it attracted a seven-figure sum during this invest-round, but did not say the exact figure. The round was also attended by DMG Blockchain and Block X Capital.

In addition, iComply reported that it was joined by former employee of the Commodity Futures Trading Commission (CFTC) Jeff Bandman, former Managing Director of NASDAQ and the Financial Services Industry Regulation Service (FINRA) Manny Alikandro, MIT Connection Science program member, Praveen Mandal and Prosecutor Thomas Linder.

According to Sharma, he decided to invest in the startup iComply, because the project "is focused on services for ICOs related to risks and compliance with standards." Compliance with the standards, he said, will ensure the transparency of ICO issuers and thereby help to ease the concerns of regulators.

Sharma also believes that iComply can contribute to the spread of crypto technologies, helping the entry of traditional financial services into this industry.

My interest is to see iComply evolve into a benchmark that investors can use to assess credibility of issuers, sustainability of underlying services and the price of ICOs. iComply's patent-pending software enables both security and utility tokens to monitor and document compliance, governance and risk procedures, before a public blockchain executes an immutable trade, providing trust, integrity and transparency for our clients. There have been a few ICOs that had a fundamentally robust offering that I understood and did interest me [but I] missed the opportunity. Others that have transparency from a service like iComply, I would [invest in].
 

Deven Sharma

Ex-president, Standarts & Poors

It is the ideas of transparency and trust, according to Sharma, that sparked his interest in order to start working with the blockbuster.