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Bitcoin Exchanges can now be covered for Theft: Mitsui Sumitomo Insurance offering a unique policy

When there is a digital ecosystem that is minting money, there would be graded tech hackers attempting to steal it. Story of Bitcoin and Bitcoin related businesses are no different. Major exchanges are always prime targets of such thefts and even high level security might turn out to be futile. Few of the notable examples are Mt.Gox which caused the rapid downfall of Bitcoin and the very recent Bitfinex hack. Even though Bitfinex is trying its best to reimburse the victims of the hack, it gets difficult to build  a trustworthy Bitcoin exchange with such events. It also gets difficult for exchanges to operate in full confidence. Trying to change this landscape, Mitsui Sumitomo is offering insurance to exchanges against thefts. Let’s look into the details of this policy:

History of insurances in cryptocurrency world:


A formerly existing wallet service named Elliptic Vault was probably the first ever insured bitcoin service. They launched in January 2014 and named Lloyd’s as their insurer. Unfortunately, Lloyds backed out of the deal, but the service was able to find another insurer, CBC insurance. Following this, the Great American Insurance Company offered the first official Bitcoin Insurance coverage policy to businesses. Later, bitcoin vault Xapo announced that they were using AMBest to insure their high-security vaults. Following year, Coinbase and BitGo made insurance protection a common feature in the largest bitcoin wallet services.

What Mitsui Sumitomo offers?


Mitsui Sumitomo is offering a unique policy for Bitcoin exchanges around the world. The plan’s total theft cover ranges from ten million yen (US$88,500) up to one billion yen (US$8.85 million). In addition to theft, it also covers loss from internal and external threats, including employee theft, mistakes, cyberattacks, and other unauthorized access. Additional to the recovery amount, the policy comes with a range of damage control and prevention services.

The plan’s announcement states:

“In order to prevent damage caused by cyber-attacks, targeted mail training and information leakage risk, we provide cyber risk countermeasure services such as security diagnosis and checklist for employees.”

First takers:


The new insurance product was developed in partnership with Japan’s largest exchange, Bitflyer. The exchange helped develop a policy that protects against losses at both the exchange and customer levels, and is the also the first policyholder. BitFlyer now accounts for an overwhelming 68 percent of the yen trading volume.

Japan Firm Shows Love to Bitcoin With Insurance for Bitcoin Exchanges

It is no longer news that Japan is one of the most conducive countries for Bitcoin operations. Bitcoin is already recognized as legal tender on par with the Yen in terms of acceptability. Of course, Japan used to be home the world’s biggest Bitcoin exchange, the now defunct Mt. Gox. In October, Japan decided to curb sales tax on Bitcoin purchases as part of efforts to boost the use of the cryptocurrency in the country.

The Nikkei Asian Review reported that the Japanese Financial Ministry and the country’s Financial Agency are in talks to end the 8% consumption tax rate. Now, there’s another piece of good news for Bitcoin coming out of Japan that will gladden the heart of Bitcoin investors. The Nikkei Asian Review reports that Tokyo-based insurance firm Mitsui Sumitomo Insurance is developing an insurance product that will cover damages and losses at Bitcoin exchanges.

Here’s what we know about the new insurance coverage for Bitcoin exchanges

Mitsui Sumitomo Insurance is reportedly working with bitFlyer to develop an insurance product for Bitcoin exchanges. The insurance premium payable will vary from one exchange to the other but actuarians forecast that the premiums will range between several hundred thousand Yens to several million Yens.

One of the great perks of having insurance coverage for Bitcoin exchanges is that it would ease anxiety among Bitcoin owners that their precious crytocurrency could be lost overnight in an hack. Security experts observe that a single successful cyberattack on a Bitcoin exchange could wipe out billion of yen in Bitcoin. Most small exchanges don’t have enough resources to create a security system that might keep the bad guys out and even the best security defenses might still succumb to the efforts of a determined hacker.

Bitcoin exchanges can now enjoy insurance coverage

In the last couple of years, the Bitcoin industry has suffered setbacks in the form of data breaches, hacks, and stolen Bitcoin at exchanges. If you lost money in the last couple of hacks targeted at Bitcoin exchanges, you might want to relax because the trouble days are over. According to the report, the Japanese insurance firm will provide coverage against damage and loss to Bitcoin exchanges for 10 million yen to 1 billion yen, which is between $88,000 and $8.8 million.

Another great feature of the insurance coverage is that it protects Bitcoin owners in the event of losses due to internal issues. Bitcoin exchange might make dumb business moves or its workers might perpetrate fraud but insurers are not usually willing to cover losses that happen because of internal issues. For instance, in 2015 BItpay suffered the theft of 5,000 Bitcoins during a phishing attack. Its insurer has refused to cover the losses which is running under a million dollars.

Mitsui Sumitomo Insurance has also revealed that its insurance policy for Bitcoin exchanges will also cover other costs that might accrue after an incident. For instance, the insurer will bear the costs of reaching out to customers in the event of a data breach; the insurer will also settle damage suits that might be filed against the exchange in the event of theft, losses, hacks, or data breaches.

Bitcoin Exchanges Now Get Insured