The product targets crypto-asset service providers in Europe, with a particular focus on firms operating under the EU’s Markets in Crypto-Assets (MiCA) regulation. MiCA is designed to create a unified regulatory framework for crypto markets across the EU, with the aim of increasing transparency and strengthening investor protection.
Coverage includes risks such as professional liability, management errors, theft, and fraud, with limits of up to €3 million. The product is available to a wide range of firms, including banks, asset managers, and blockchain-based startups.
The launch comes at a time of heightened regulatory and operational complexity in the digital asset space. Financial institutions are increasingly looking for insurance solutions to manage risks associated with new technologies and evolving compliance requirements.
In the UK, the cryptocurrency sector continues to develop under a separate regulatory path. While the UK is not subject to MiCA following its departure from the EU, the Financial Conduct Authority (FCA) has taken steps to regulate crypto-asset promotions and strengthen oversight of digital asset firms. In 2023, the FCA introduced new marketing rules for crypto products, including a cooling-off period for retail investors. The government has also proposed bringing certain crypto activities under the same regulatory regime that applies to traditional financial services.
LSM’s product was developed in collaboration with its cyber and technology teams to address specific gaps in crypto-related coverage and to support firms seeking to expand into or operate more securely within the digital asset market. It complements the insurer’s existing portfolio for financial institutions in Europe, which includes cover for professional indemnity, directors’ and officers’ liability, and bankers’ blanket bonds.
Jorge Chao (pictured inset above), head of financial institutions for LSM in Europe, said the growth of the crypto sector is reshaping global finance, but that the risks involved remain significant. He noted the product is intended to support financial institutions as they adapt to changes in technology and regulation.
