[Provided by KODA]
[Provided by KODA]

Korea Digital Asset (KODA) announced Monday that it has signed a digital asset insurance contract with KB Insurance worth up to $40 million.

The policy covers losses customers may suffer if digital assets held in KODA's custody are damaged, lost or stolen.

KODA first introduced a voluntary insurance policy — separate from the legally mandated coverage — in July last year, and has now expanded the coverage limit one year later.

Under current law, the minimum compensation threshold that custody service providers must maintain through insurance and reserves stands at 500 million won ($349,000). KODA's new coverage limit is more than 100 times that statutory minimum.

Industry observers expect demand for institutional digital asset custody to grow as corporate participation in the virtual asset market is phased in and legislative discussions around a basic digital asset law continue. Custody providers are responding by strengthening asset protection frameworks, including insurance coverage and internal controls.

"The first thing institutional clients look at when choosing a custody provider is the coverage limit and scope of insurance," KODA Chief Executive Cho Jin-seok said. "By raising our customer asset protection to the level expected by traditional finance, we are ready to safely custody institutional funds once the corporate market fully opens."

A KB Insurance official said the agreement reflects a combination of the high coverage standards the virtual asset market demands and the company's own risk underwriting capabilities. "As digital assets become fully integrated into the regulated financial system, the role and weight that the insurance industry must play will only grow," the official added.

KODA was jointly established in 2020 by KB Kookmin Bank and blockchain investment firm Hashed, and holds a market share of more than 80 percent in the domestic digital asset custody market.


kyoung@heraldcorp.com