Hanfa Insurance of Korea announced starting to consider providing hacking insurance for cryptocurrency exchanges.

Hanwha General Insurance, a major South Korean insurer, announces consideration of providing hacking insurance for cryptocurrency exchanges

The News Asia in Korea reported thatHanwha General Insuranceis beginning to explore offering insurance services for cryptocurrencies that have been expropriated due to cyber attacks on cryptocurrency exchanges.

In Korea, this would be the first insurance for cyber attacks on cryptocurrencies, and there are currently no such offerings from Japanese insurers.

In fact, Korea’s largest domestic cryptocurrency exchangeBithumbhas already contracted with two insurers, Hyundai Marine & Fire Insurance and Heungkai Marine & Fire Insurance, but neither provides insurance for cryptocurrency withdrawal incidents; they coverdata breachinstead.

Therefore, Hanwha General Insurance stated

Even if an exchange seeks insurance, it would require a relationship of parity between the insurer and the exchange

Quote:Asia Times

and, according to The News Asia, negotiations including reinsurance firms are expected to start with various exchanges from October onwards.

In Japan, notable cyberattack cases on cryptocurrency exchanges include the 2011Mt. Gox incidentand the 2018Coincheck incidentas famous examples; in Korea, cyber incidents targeting exchanges such as the June 2018Bithumb incidentand the Coinrail incident have been increasing.

According to materials produced by the Korean government, the total damages from cybercrime targeting cryptocurrency exchanges and holders amount to about $110 million (approximately 11 billion yen in Japan).

From this, it is natural that demand for hacking countermeasures and related insurance would grow significantly.

Korean laws regarding cryptocurrency are

Currently in Korea, there are no laws specifying aninsurance law for hacking related to cryptocurrency exchanges.

Thus, the insurance negotiations between Hanwha General Insurance and each exchange are voluntary rather than mandatory.

However, since most Korean cryptocurrency exchanges belong to the Korea Blockchain Association, which concluded a memorandum of understanding with Hanwha General Insurance in August 2018, it is clear that there is an environment in which contracts with Hanwha General Insurance are increasingly likely.

Global reality of cyber countermeasures

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