How To Use Insurance To Shield Against Cryptocurrency Risks


Law360 reports: “As cryptocurrencies continue their meteoric rise, companies in the space are facing an expanding range of risks, including the threat of large-scale theft and class actions filed by disgruntled investors in funding ventures known as initial coin offerings.” 

With regard to insurance coverage for cryptocurrency theft, Daniel J. Healy told Law360 that recent U.S. court of appeals decisions in Medidata and American Tooling Center indicate that some courts are now taking a broader view of what can constitute computer fraud under crime policy language.

With regard to regulatory investigations by the SEC and Federal Trade Commission, Stephen D. Palley told Law360, "When looking at an SEC or FTC investigation into a token offering, we would expect case law like the MBIA decision [finding broad coverage under a D&O policy for costs relating to a government investigation] to apply. Even though we are dealing with a new kind of technology, that doesn't mean old case law can't apply."