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A surge of aggressive assaults on cryptocurrency investors is prompting insurers to formulate new safeguards focused on an escalating physical danger: abduction for crypto.
At least three businesses specializing in crypto insurance and safety are currently preparing customized kidnap and ransom (K&R) policies specifically for digital asset stakeholders, as per a recent article from NBC News.
Rebecca Rubenfeld, chief operating officer of AnchorWatch, remarked that fear of violence was a prevalent theme at this week’s Bitcoin Conference in Las Vegas. “They’re anxious,” Rubenfeld stated. Her company anticipates launching K&R coverage by autumn.
Physical assaults on crypto investors are not a recent phenomenon, with instances recorded for over a decade. However, recent events, such as the extended torture of an Italian tourist in Manhattan and the abduction of crypto leaders in France, have heightened apprehensions.
The decentralized essence of cryptocurrencies renders crypto executives appealing targets. Accounts are governed by individuals, transactions are irreversible, and assets can be cleaned if criminals gain access credentials.
Related: Crypto investor loses $2.6M in stablecoins in dual phishing scam
Crypto wealth embraces K&R insurance
Crypto wealth is moving towards traditional K&R insurance, which is prevalent among corporate executives. Andrew Kurt, vice president of executive risk at Hylant Capital, highlighted that K&R has historically been very profitable for insurers due to its low claim frequency but high impact.
“I believe what has happened isn’t likely to be a significant frequency problem, but rather a severity issue every now and then,” Kurt expressed.
Relm Insurance CEO Joseph Ziolkowski mentioned that his company is finalizing its K&R offerings, but pricing is intricate, necessitating thorough evaluations of a client’s physical and cyber defenses.
“If someone has a 24/7 personal security detail accompanying them consistently, that would indeed serve as a credit and impact premiums,” he noted.
Related: French minister to engage with crypto firms following kidnapping attempt
Rise in crypto-related crime
On May 27, South Korean authorities disclosed that they apprehended one Russian national accused of attempting theft during a fraudulent crypto transaction in Seoul. The suspect allegedly enticed Korean investors to a hotel, where they attempted to steal 1 billion won (approximately $730,000) in cash.
This incident took place amidst a recent increase in crypto-related violent crimes, encompassing kidnapping and ransom incidents.
On May 13, the family of Pierre Noizat, the co-founder and CEO of French crypto exchange Paymium, was targeted in a kidnapping attempt.
In response, executives and investors in the crypto sector are increasingly pursuing personal security services. On May 18, the private firm Infinite Risks International reported a surge in requests for bodyguards and protection contracts from prominent figures in the crypto realm.
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