Binance is scrambling to compensate customers after suffering a massive $6.3 billion hack, but the crypto exchange may only recover a small portion of its losses through insurance. The company holds directors and officers insurance to protect executives from regulatory or legal fallout, but it lacks cyber insurance, a gap shared by many crypto firms.
A source familiar with Binance’s internal operations confirmed that obtaining cyber insurance has been a persistent challenge for the company. Even when crypto firms manage to secure coverage through other policies, such as crime or D&O insurance, exclusions often limit their ability to recoup losses.
The hack underscores the vulnerabilities in the crypto industry’s insurance landscape, where gaps in coverage can leave companies and customers exposed to significant financial risks. Binance’s struggle to mitigate the fallout highlights the broader challenges facing digital asset platforms in safeguarding against cyber threats.