Hanwha insurance, a South Korean insurance firm is going to provide hack insurance for South Korean cryptocurrency exchanges.
The Trend Of Cryptocurrency Exchange Hack
The lucrativeness of the nascent cryptocurrency industry has made it a target for hackers. One of the significant menace battling the cryptocurrency community is the activities of cyber attackers. Their activities range from wallet hacking, exchange hacking, Bitcoin ATM hacking, among others.
In 2018 a total of four cryptocurrency exchanges have been hacked, and over $700 million worth of cryptocurrencies was stolen. This shows the vulnerability most of the cryptocurrency exchange lies in, as there is no permanent solution to the activities of hackers yet.
Hanwha Insurance Offering Security To Cryptocurrency Exchange In South Korea
South Korea, one of the most advanced countries in the cryptocurrency adoption has not been left out. Over $40 million worth of cryptocurrencies was stolen from Conrail cryptocurrency exchange and over $31 million stolen from the Bithumb this year.
Putting the minds of cryptocurrency exchanges and also users who have their assets on these exchanges at rest, Hanwha Insurance, a Korean based company is offering cryptocurrency exchanges in South Korea the opportunity to get their exchanges insured against hacks.
The type of hack insurance presently provided is for leakages of personal information. But the new hack insurance policy of Hanwha will compensate for damages caused by a loss of a digital asset. The insurance rate will be determined by the risk generated by the exchange and Hanwha will determine the amount of risk.
According to a spokesperson for Hanwha insurance, the firm plans to start negotiations with individual exchange starting from the following month. He further states that the insurance service is not compulsory for all the exchange but will be beneficial for those who opt for it. Provision of the service will require a lot of coordination between the insurance company and the exchanges, according to the spokesperson.
Cryptocurrency exchanges getting insured will provide the exchange with greater security against the menace of hacking. Though this is not made mandatory for exchanges, nevertheless, there is a need for insurance measures like the traditional banking system.
This might not be a lasting solution to the hacking menace. However, it will provide a safe landing for user investments in insured cryptocurrency exchanges for now. More exchanges globally are expected to get similar measures in place soon.