KODA Secures $40 Million Custody Insurance as Korea Pushes Institutional Crypto Standards

Korea Digital Asset (KODA) said it has secured a dedicated digital-asset custody insurance policy with a coverage limit of up to $40 million, a move the firm described as the largest protection cap currently available in South Korea’s custody market. The policy, underwritten by KB Insurance, is designed to compensate clients if assets held in KODA’s custody are damaged, lost, or stolen.

KODA announced the agreement on July 30 (Tuesday UTC), positioning the expanded coverage as a response to rising institutional expectations for operational resilience and risk management as South Korea’s regulatory framework for digital assets continues to mature. In custody, a third-party provider safeguards and administers customers’ crypto holdings—services increasingly demanded by corporations and asset managers that require bank-grade controls.

The $40 million limit doubles what KODA characterized as the previous domestic high-water mark of $20 million. The company also framed the upgrade as a continuation of its earlier efforts to exceed baseline requirements: in July 2025, KODA introduced an additional voluntary insurance layer alongside legally mandated coverage, claiming it was the first in the local custody industry to do so. With the new arrangement, KODA said it has doubled its protection ceiling within a year.

The increase stands in sharp contrast to the minimum coverage expectations embedded in South Korea’s Virtual Asset User Protection Act, which requires custody operators to maintain insurance and/or reserves with a minimum compensation threshold around 500 million won. KODA’s new policy limit is more than 100 times that benchmark, highlighting a growing gap between statutory minimums and the 'institutional-grade' standards that large investors typically demand.

Market participants see that gap becoming more consequential as South Korea moves toward broader participation by corporate entities. Authorities have been gradually advancing measures to allow corporate trading accounts, while policy discussions around a proposed Digital Asset Basic Act continue. As those initiatives progress, demand from investment firms and asset managers for professional custody—and for credible protection frameworks—could expand meaningfully.

“When institutional clients select a custody provider, the first thing they look at is the insurance coverage limit and scope,” said Jinseok Cho, CEO of KODA. He added that the higher limit is intended to bring client asset protection closer to the standards of traditional finance and to prepare the company for a potential influx of institutional capital as the corporate market opens further.

A representative from KB Insurance said the partnership reflects the market’s push for higher coverage levels and the insurer’s ability to underwrite risk in a rapidly evolving sector. The representative added that as digital assets become more deeply integrated into regulated finance, the role of the insurance industry is likely to expand in both scale and importance.

KODA said it plans to continue increasing coverage limits in line with regulatory developments and shifts in market demand. Founded in 2020 by KB Kookmin Bank and Hashed, KODA focuses on custody services for institutional and corporate customers and has claimed more than 80% share of South Korea’s digital-asset custody market. The company also raised a 10 billion won Series A round in 2025, with investors including Hanwha Investment & Securities, IBK Capital, and Kyobo Securities.