Crypto bourses can’t get cover for cyber risks

Chennai: In the absence of regulation, cryptocurrency exchanges in India are not being able to get insurance protection against cyber risks like ransomware attacks and business interruption. This is primarily because the RBI, which places a higher risk for the insurance underwriter, does not recognise cryptocurrencies. A senior executive at Future Generali India Insurance said that insured loss can be settled only in rupee and dollar — the currencies in which cyber insurance claims are settled. Insurers said that they can come up with a definition of insured loss for this segment only after a law on cryptocurrency is introduced. In ransomware attacks, hackers typically demand ransom in bitcoin or other cryptocurrencies. Insurers pay out 50-60% of the premium they collect through cyber risks as claims.

“There is no insurance underwriter who has a product to cover our risks — cyber theft or ransomware attacks — in this country. With the lack of any clear regulation to acknowledge cryptocurrency trading exchanges, insurers do not want to cover us. If an exchange loses large sum against ransomware theft, it has to bear the loss,” said Nischal Shetty, CEO of WazirX, a crypto bourse. Most exchanges are international companies with much higher exposure to risk, a non-life general insurance company exectuve said. Insurers have placed crypto exchanges under the decline list or those businesses that are excluded from coverage, another insurer said. Sharan Nair, chief business officer at CoinSwitch Kuber, a crypto exchange, said, “There is no insurance cover in India to cover us from the consequences of cyberattacks. Even those covers offered abroad are inadequate and cannot provide coverage to the entire crypto assets that exchanges hold.”