A Rise in Cryptocurrency Hacks
Cryptocurrency was created as an alternative to the traditional monetary system, run on a distributed public ledger called a blockchain. Cryptocurrencies are an attractive asset to many investors as they are limited in quantity but are increasingly in demand, with over 420 million crypto users worldwide.
In the last year, several high-profile cryptocurrency hacks have occurred. This includes the hacking of the largest cryptocurrency exchange in the world, Binance, resulting in a loss of USD 566 million. This attack contributed to a record total of USD 3.8 billion in crypto-financial losses for businesses and individuals.
Alongside attacks on businesses, Decentralised Finance (DeFi), the financial infrastructure that facilitates cryptocurrency transactions, has become the biggest victim of cryptocurrency hacks, accounting for 82.1% of all cryptocurrencies stolen.
Considerations for underwriters
Despite the value of cryptocurrency such as Bitcoin falling by 60% last year, the increase in crypto heists demonstrates the heightened attractiveness of cryptocurrency.
Underwriters may want to review their crime wordings to ensure they have adequate protections in place against such losses.
Also, when conducting risk assessments of prospective policyholders, insurers may want to revisit the checks they make to ascertain whether crypto businesses have adequate security procedures in place.
Contents
- The Word, February 2023
- Product distribution – protecting yourself from an early exit
- Brian Leighton (Garages) Ltd v Allianz – guidance on the meaning of ‘proximate cause'
- Court of Appeal considers law and jurisdiction clause within suite of multi-risk policies
- ChatGPT – is AI a help or hindrance to underwriters?
- Many businesses (still) not protected against cyberattacks, report says
- Recent EIOPA Updates
- A new wave of claims?
Key contact
Tim Johnson
Partner
tim.johnson@brownejacobson.com
+44 (0)115 976 6557
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