Onedegree partnering with Hong Kong Bitcoin Exchange to offer insurance cryptocurrency holdings
Onedegree, a Multi-line insurance firm located in Hong Kong, will insure digital assets through collaboration with HKbitEX, a local cryptocurrency exchange.
According to OneDegree, it has insured $100 million in digital assets held by HKbitEX, and claims to be the first insurance company for digital assets in Asia.
OneDegree believes that the demand for digital asset insurance is increasing, and insurance and risk management for digital assets will enhance investor trust and assist the sector to thrive.
Physical damage to wallets caused by natural occurrences, cybersecurity threats such as outside hacking or malware threats, and fraudulent activities are all covered by third-party insurance.
Ken Lo, the co-founder of HKbitEX, said he wanted additional institutional investment in cryptocurrencies after the announcement.
He adds, "With over 1,800 licensed asset managers, Hong Kong is home to over US $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."
The debut comes as bitcoin reached a new high of US$68,500 on Tuesday, pushing the total market capitalization of all cryptocurrencies to US$3.1 trillion, including ethereum and litecoin.
Due to the risks of hacking and theft, some global asset managers and sovereign wealth funds have avoided digital assets.
According to many media sources news, the Japanese cryptocurrency exchange Liquid was struck through a cyberattack in August that resulted in losses of US $97M when some of its bitcoin wallets were compromised.
Insuring cryptocurrency from cybersecurity risks remains difficult from a global perspective because few insurers and reinsurers are willing to do so. Some industry players estimate that today's coverage capacity is well below $1 billion per transaction.
Murray Wood, Asia head of financial specialties at Aon, said the cryptocurrency sector is focused on mitigating risks posed by cyber threats, such as third-party hacking and theft.
CBW - External Analyst