Fintech secures record insurance for digital asset custody

Fintech secures record insurance for digital asset custody | Insurance Business Asia

Cyber

Fintech secures record insurance for digital asset custody

Coverage supported by A-rated insurers

Cyber

By
Roxanne Libatique

​​​OSL Digital Securities, a fintech and digital asset company and a subsidiary of OSL Group, has announced securing US$1 billion in insurance coverage for its digital asset custody services.

This insurance deal, which the company claims to be the largest ever placed for a digital asset custodian, represents a significant step in bolstering OSL’s leadership in the sector.

The Hong Kong-based company, which is the only publicly listed firm focused solely on digital assets, aims to enhance investor protection and comply with standards set by Hong Kong’s Securities and Futures Commission (SFC).

OSL Digital Securities US$1 billion digital asset insurance coverage

The US$1 billion insurance policy, led by Canopius, a global specialty insurer operating under Lloyd’s of London, is supported by a group of A-rated insurers. It is notable for both its scale and duration, setting a global benchmark in the digital asset industry.

Kevin Cui, CEO of OSL, said the coverage provides foundation for further growth and supports the trust the company has built with its clients and it continues to evolve within the market.

“This record-shattering insurance coverage is bringing the digital asset industry’s standard to the next level,” he said.

Nicholas Edwards, head of specie at Canopius, highlighted the insurance market’s confidence in OSL’s custody solution.

“The size of this placement and the length of the commitment is a testament to the insurance market’s view on the quality of the OSL custody solution,” he said.

Finalisation of OSL Digital Securities digital asset insurance coverage

The arrangement was brokered with assistance from Paragon International Insurance Brokers and Capstone Insurance Brokers.

Jeff Hanson, senior vice president at Paragon, noted that this is the first deal of its kind in the digital asset space.

“We have exhausted the international marketplace, bringing new insurance capacity into the sector, and are pleased to have reached this significant milestone for OSL, which is the first of its kind in the market,” he said.

Dan Dibden, co-founder of Capstone, emphasised the long-term effort required to finalise the agreement.

“A significant amount of hard work over many years has gone into this placement, and we are thrilled to have secured this programme for OSL,” he said.

OSL’s expanded insurance framework is part of its broader strategy to support the issuance of digital asset exchange-traded funds (ETFs) and other regulated financial products in Hong Kong.

Cyber threats surge for APAC financial institutions

The announcement of OSL’s record-breaking insurance coverage comes as financial institutions across the Asia-Pacific (APAC) region face increasing cybersecurity risks.

DDoS attacks aim to overwhelm a network’s infrastructure, potentially causing significant service outages and leading to financial losses and regulatory consequences. Akamai linked the surge in cyberattacks to ongoing geopolitical tensions, citing hacker groups such as REvil and KillNet, which have been associated with global conflicts like the Russia-Ukraine war.

Phishing remains the most common form of cyberattack in the region, targeting customers of financial services through counterfeit websites and brand impersonation. The report found that 68% of all counterfeit domains targeted financial institutions, contributing to increased risks for the sector.

Insurers and asset managers increase cybersecurity budgets

In response to the rising cyber threats, insurers and asset managers are expanding their cybersecurity investments.

The survey found that firms are increasingly adopting advanced security practices, such as routine vulnerability assessments and comprehensive incident response plans. Additionally, nearly all firms now require cybersecurity reviews for new vendors, with 91% conducting regular follow-up evaluations to ensure continued compliance with security standards.

There is also a growing shift toward cloud services, with insurers and asset managers planning to reduce their reliance on on-premises IT infrastructure from 65% to 55% over the next year. Firms expect cloud platforms to improve scalability and security, reflecting broader digital transformation trends in the financial sector.

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