Many digital asset investors have decided to ensure safety by investing in kidnapping and ransom (K&R) policies. Crypto investors were seeking K&R policies due to increased physical attacks witnessed in recent months. Insurance firms have been preparing these policies for crypto investors.
As per a report by NBC, there has been an increase in violent attacks on crypto investors over the last few months. Investors have sought crypto insurance and security from insurance companies. At least three insurance companies have started preparing kidnapping and ransom policies.
Digital asset owners experience physical and digital attacks
Rebecca Rubenfeld, AnchorWatch’s Chief Operating Officer, recently said the firm was preparing to offer kidnapping and ransom protection. Rubenfeld added that the fear of violence was a main topic at the recent annual Bitcoin Conference. The COO stated that many crypto investors were nervous due to increased attacks on crypto holders.
An Italian tourist was recently tortured for several weeks in Manhattan to access his Bitcoin. John Woeltz, the suspected kidnapper, was arrested and arraigned in court for kidnapping, unlawful imprisonment, and physical assault.
Coinbase recently said thieves stole customer information belonging to over 70,000 clients. Coinbase said some customers had already been tricked out of their crypto holdings. In a recent filing with the U.S. SEC, Coinbase revealed that it had received an extortion email from criminals who had accessed customers’ names, government identification, contact information, and addresses.
The crypto exchange added that the criminals had also obtained customers’ transactional history and some digits of their Social Security numbers. The crypto exchange revealed that the thieves tried to extort it for over $20 million. Coinbase clarified that it would not pay the amount demanded by the criminals. The exchange said it would instead offer a $20 million bounty for details that would lead to the arrest of the criminals.
Insurance firms prepare to offer K&R insurance
Ryan Lackey, the CEO of Evertas Insurance, said the right protection for wealthy crypto holders was to have physical security. Lackey added that digital asset wonders should also make it public that they could only access a particular portion of the funds.
The CEO stated that most of their digital assets should be guarded with passwords and stored in secure locations such as safety deposit boxes and banks. Lackey said Evertas advises clients to opt for kidnapping and ransom insurance. The CEO revealed that the firm was considering how best to provide K&R insurance.
The vice president of executive risk at Hylant Capital, Andrew Kurt, said he was not amazed to see many crypto firms providing kidnapping and ransom insurance. Kurt revealed that K&R insurance was lucrative, given how relatively few digital asset owners get kidnapped.
The vice president said K&R has been profitable for insurance firms even though its premiums were very small. Kurt explained that losses in the K&R insurance business were few. The vice president also said that what had happened in the crypto industry would not become a frequent issue. Kurt added that the few kidnapping and ransom cases would just be more of a severity issue.
Joseph Ziolkowski, the Chief Executive Officer at Relm, said his firm has been considering launching K&R insurance. Ziolkowski revealed that the process of preparing K&R insurance was a bit complicated. The CEO stated that the firm would need to evaluate the client’s cyber and physical security before offering K&R insurance.
Ziolkowski added that there would be a base rate for pricing the K&R coverage. The CEO clarified that the base rate would be debited and credited according to favorable or unfavorable circumstances tied to a particular risk. Ziolkowski said if the client has full-time security details that travel with them at all times, that would obviously be a credit, impacting the premium.
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