CBUAE Approves Digital Assets Custodial Risk Insurance

Hong Kong’s OneDegree, Asia’s first licensed insurer for digital assets, on Thursday said that the company along with Dubai Insurance Company have started issuing digital assets custodial risk insurance to their customers in UAE after gaining a key approval from the Central Bank of UAE (CBUAE).

OneDegree and Dubai Insurance announced their partnership last year and have supported many digital asset companies with their insurance needs. Custodial risk insurance completes the product portfolio and allows the partners to offer a one-stop-shop for digital asset companies in the UAE, under the brand ‘OneInfinity.’

Custodial risk insurance is an essential part of the risk management strategy for digital asset exchanges, custodians and other service providers and is mandated by many regulators worldwide, One Degree said.

VARA, Dubai’s dedicated regulator for digital assets, requires such coverage along with professional indemnity and directors & officers’ insurance. With this latest approval, specialised custodial risk insurance can be offered directly in the UAE for the first time.

Custodial risk insurance protects companies against the risk of losing access to digital assets including through third party hacks and theft, internal fraud and physical damage to the storage media.

OneDegree Middle East General Manager Robin Scott said that the UAE has only strengthened its position as a digital asset hub since their market entry last year. There were hundreds of companies setting up across the UAE and looking to obtain key licences. For this they need strong, tailored insurance policies, he said.

Dubai Insurance CEO Abdellatif Abuqurah said that his company was committed to bringing the most innovative insurance products to the UAE. Custodial risk insurance is something brand new to the market but that satisfies an urgent demand as UAE cements its position as a global leader in digital assets, he added.

Tailor-Made Products

By offering tailor-made insurance to end-to-end digital asset players (including trading platforms, custodians, asset managers, banks, family offices and technology providers), ‘OneInfinity’ is enabled by first-in-class cybersecurity technology offered by Cymetrics, a sister company of OneDegree.

Its solutions include digital asset custodial risk insurance (crime, and specie) and corporate liability coverages (Professional Indemnity, Directors & Officers, Investment Management and Cyber).

‘OneInfinity’ offers tech-enabled digital asset insurance and risk management solutions globally. Dubai Insurance has a rich and extensive history that dates back several decades. Incorporated by H H Sheikh Rashid Al Maktoum as the first local company in the UAE in 1970, it is the first national insurance company to be founded in the UAE.

OneDegree has partnered with Saudi Arabia’s Walaa Cooperative Insurance Company, an insurance and reinsurance company, where Walaa will support OneDegree as a reinsurer for its market-leading digital asset products globally. The partnership was announced during the 24 Fintech event in Riyadh.