A dedicated insurance for corporations that act as custodians of virtual assets has emerged for the first time in Korea. As the participation of corporations in the virtual asset market becomes possible, additional safeguards are necessary, leading to an increasing trend of interest from insurance companies.
According to the virtual asset industry on the 23rd, Samsung Fire & Marine Insurance entered into a virtual asset-specific insurance contract with Korea Digital Asset (KODA) the previous day. This product is a high-risk, high-limit dedicated insurance for custodians, prepared in anticipation of the expansion of corporate and institutional investors, with an initial subscription amount of $20 million (approximately 27 billion won). KODA plans to discuss expanding the compensation limit with overseas insurance companies as the scale of the entrusted assets increases. KODA is a virtual asset custody company established by Hashed and KB Kookmin Bank.
This insurance is evaluated as the first virtual asset custody insurance in Korea with internal controls and a guarantee system at the level of financial institutions, but the practical risk-taking structure is borne by overseas reinsurers rather than domestic insurers. Samsung Fire & Marine Insurance acts as the issuing entity in the contract with KODA, but since there are no established regulatory standards or risk assessment systems for virtual asset insurance in the country, most insurance risks have been transferred through overseas reinsurers. Consequently, the premiums are relatively high, and the coverage conditions are known to be limited.
Although the scope of coverage has not been officially disclosed, industry sources suggest that it may include insider incidents, loss of private keys, and damage to physical storage systems that custodians may face. KODA management explained that they manage assets with separate wallets and independent private keys for each customer, indicating that compensation is provided at the wallet level rather than for all customers in the event of an incident. This is a 'wallet separation compensation method' designed so that issues with a specific wallet do not affect the assets of other customers.
The background of the emergence of such products lies in the expansion of corporate entities in the domestic virtual asset market. It is a natural progression that as corporations start investing in virtual assets, the demand for virtual asset custody increases. Corporate investors are subject to strict internal controls, legal responsibilities, and accounting standards that differ from individual investors. Therefore, custody companies provide asset proofs and reports necessary for audits while monitoring assets through security infrastructure.
The problem lies in the risks that may arise as corporations use custody services. Hacking and insider incidents are representative examples. In overseas markets with active institutional investors, various insurance products for custody services have already been launched. Global insurance companies such as Lloyd's of London, Aon, and Marsh are developing exclusive products for digital asset companies and designing customized insurance.
However, there are currently no domestic insurance companies selling products that cover losses related to virtual assets. First, virtual assets are highly volatile, making it difficult to assess insurance risks and set premium rates. Additionally, there is a lack of clear accounting or legal status regarding virtual assets in the country. It remains ambiguous whether to view virtual assets as currency or as assets. Along with this, the financial authorities are taking a conservative and cautious stance on new financial products, making it difficult for insurance companies to take decisive action.
An insurance industry official noted, 'Recently popular pet insurance was only offered by a single company in the past,' and added, 'As the virtual asset market grows, new products reflecting emerging risks and demands in the insurance sector may come about.'