Surge in Attacks Spurs Drastic Insurance Shift
There has been a sharp surge in violent assaults on crypto holders that has prompted insurers into developing kidnap and ransom (K&R) policies targeted at investors in digital assets. The initiatives come after headline-grabbing attacks, including the recent torturing of an Italian tourist in Manhattan and abductions in Europe.
At least three insurance and security firms are creating tailored K&R coverage for crypto holdings, reports NBC News. AnchorWatch COO Rebecca Rubenfeld noted the heightened tension at the Bitcoin Conference in Las Vegas, saying, “They’re tense.” AnchorWatch is scheduled to enter the market with its K&R product later this fall.
Why Crypto Holders Are Prime Targets
Cryptocurrency’s decentralized nature makes it particularly susceptible. As opposed to conventional financial systems, assets are held directly by individuals, with permanent transactions and limited recovery possibilities once credentials are lost.
Crypto’s high-net-worth individuals usually hold their own keys and wallets, making them prime targets for perpetrators who want quick and untraceable pay-outs.
Conventional K&R Insurance Evolves to Cover Crypto Risks
Initially utilized by CEOs of companies, kidnap and ransom insurance is now being taken up by crypto investors. Andrew Kurt of Hylant Capital explained that while the frequency of such claims is low, the scale is enormous—thus the profitable business for insurers.
Relm Insurance CEO Joseph Ziolkowski announced the news that his firm is finishing its own K&R package policy. “Pricing is advanced,” he said, citing such factors as physical security levels and cyber preparedness. “If an individual has 24/7 personal security, that obviously affects the premium.”
Recent Cases Illustrate Rising Dangers
On May 27, the South Korean police arrested a Russian suspect who was involved in a fake crypto transaction that turned into an attempted heist of over $700,000. The family of Paymium CEO Pierre Noizat had earlier been victimized by an attempted kidnapping in France.
These cases are some of an emerging pattern of criminal behavior with the intent of exploiting the portability and anonymity of crypto.
Personal Security Highly Sought After
As the threat landscape evolves, crypto operators are contributing more to invest in private security. Infinite Risks International reported that there is increased demand for protection services and bodyguards since mid-May.
As crypto fortunes are no longer just a digital vulnerability vector but also a physical one, the industry is being forced to evolve. Insurance providers are filling the gap—offering a new kind of protection for a new kind of asset.
