Crypto exchanges, nft marketplaces
Exchanges & Marketplaces
The creation of blockchain and DLT has allowed for the emergence of a new asset class - most notably in the form of cryptocurrency and NFTs. While online exchanges and digital marketplaces are nothing new, many have emerged or adapted to exclusively facilitate the exchange of digital assets. In most jurisdictions, crypto currency is not viewed as legal tender and therefore excluded from traditional deposit insurance protection mechanisms. This exposes digital custodians and their users to additional risk in the event of a cyber breach, criminal act or other loss funds.
What exchanges and marketplaces do we insure?
Our digital asset practice works with both exchanges and Peer-to-peer marketplaces across the wider web3 ecosystem, including:
Cryptocurrency trading platforms
P2P marketplaces
NFT auction sites
Hot & Cold wallet providers
Digital Custodians
Blockchain-facilitated Exchanges
Common types of insurance.
Custodian/Digital Asset Insurance
As the name suggests, this form of coverage protects against the loss of digital assets due to criminal acts, employee theft and related causes of loss. For digital custodians, it is imperative that client assets are insured in the event of an unforeseen loss. Coverage can be offered for both hot and cold wallet storage with varying terms and conditions.
errors & omissions liability insurance
Errors & Omissions or professional liability insurance protects organizations from claims of 3rd party financial loss due to allegations of negligence in the professional services rendered. For an exchange or marketplace this could emanate from a disgruntled user, investor or partner who suffered a loss due to an error or deviation in the intended system functionality.
cyber liability insurance
Despite even the most proactive cyber security measures, crypto exchanges and P2P marketplaces remain highly attractive targets to cyber criminals given the volume and value of transactions processed. From malicious DDoS and ransomware attacks to cyber extortion and system interruptions – a cyber breach can be costly from both a financial and reputational perspective.
directors & officers liability insurance
D&O – or Directors & Officers insurance protects the personal assets of your board members and management team should they be personally sued for the decisions they make in the company. Suits may arise from shareholders or related third parties and covers the cost of both defense and settlement costs in the event of a suit.
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Directors & Officers InsuranceD&O Liability Insurance protects an organization's directors, officers and senior executives from personal liability that may result from wrongful acts or mismanagement in their appointed capacity. This form of coverage is not unique to the web3 space and is an essential form of protection for decision makers within the company.
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Cyber Liability InsuranceCyber liability insurance is an essential form of coverage demanded by those who operate within the web3 ecosystem. More specifically, this protects against the financial impacts of data and privacy breaches, malicious attacks, network outage and related cyber losses.
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Crypto Liability InsuranceLike the name suggests, Crypto Liability insurance protects against the financial risks involved with the issuance and custodial aspects of crypto currencies. Coverage is available for both hot and cold wallets and is pertinent form of coverage for those operating in the space.
