The $6.3 Billion Theft at Binance May Prompt Tighter Insurance Reviews

Insurers are expected to scrutinize crypto firms’ security and assess whether clients could face attacks like the $6.3 billion theft at Binance, potentially prompting fixes if investigators identify specific weaknesses.

During policy applications or renewals, insurers are expected to ask about firms’ exposure to Binance and their vulnerability to a similar attack. If the investigation finds specific security flaws, insurers may require other policyholders to address comparable weaknesses.

A broad exit from crypto insurance or a widespread cut in coverage is not expected. Still, Marcos Alvarez, managing director of global financial institution ratings at Morningstar DBRS, said no currently available crypto insurance can cover a loss of that size.

Binance had no cyber insurance for the theft, an issue detailed in TokenPost’s earlier report on the exchange’s coverage gap.

Cyber policies placed at Lloyd’s have generally required exclusions for state-backed attacks since 2023. Alvarez said insurers may dispute or deny claims if an attack is attributed to a state. He said the effectiveness of those exclusions in a major loss remains untested.

The FBI has attributed the Binance attack to a group linked to North Korea.