According to the OneDegree Hong Kong, a licensed multi-line insurer, has inked a deal with local digital asset exchange HKbitEX to provide coverage for up to $100 million worth of crypto, The South China Morning Post reports. It will cover losses that may happen due to malware attacks, employee theft as well as physical damage.
OneDegree expects more insurers to follow its example, which will make it easier to mitigate risks linked to the volatile asset class. The company is willing to discuss its risk management practices with other players within the industry.
HKbitEX co-founder Ken Lo says that he wants more institutional capital to flow into cryptocurrencies: “With over 1.800 licensed asset managers, Hong Kong is home to over $ 3 trillion in assets under management. We want to help asset managers enter this market in ways that enable them to also fulfill their fiduciary duties to their end investors”.
Catching up with the U.S.
The absence of insurance coverage has been a big deterrent for cryptocurrency-curious asset managers in Asia. Despite coming out of age, the crypto industry is still rife with hacks and exit scams.
The cryptocurrency insurance market has been growing at a fast clip in the USA, benefiting from regulatory clarity, broader adoption of digital assets and high crypto prices.
In April, Palo Alto-based BitGo expanded insurance capacity for its institutional clients by a whopping $600 million amid skyrocketing demand.