Munich Re Backs Crypto Wallet Innovator Fordefi with Comprehensive Coverage
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Fordefi, a firm specializing in decentralized finance (DeFi) wallets, has secured crime and cyber threat insurance from the German insurer Munich Re.
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This policy, for which the exact dollar amount remains undisclosed, was arranged with the assistance of Lockton’s Emerging Asset Protection team, who are experts in blockchain insurance.
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The collaboration between Fordefi and Munich Re was announced in a blog post on Thursday, highlighting the new insurance coverage designed for Fordefi’s DeFi-focused wallet.
Lockton, headquartered in Kansas City, facilitated the coverage. The policy addresses risks including cyberattacks and internal fraud or collusion, although it does not cover vulnerabilities at the smart contract level.
While the specific coverage amount remains unspecified, Fordefi’s wallet, which employs multi-party computation (MPC) for enhanced key security, allows customers to purchase additional insurance from Munich Re individually.
The DeFi sector is renowned for its rapid innovation and decentralized trading platforms, often described as a “hackers’ playground,” making it a challenging area for traditional insurers.
Fordefi CEO Josh Schwartz noted that this insurance initiative has prompted Munich Re to delve deeper into the DeFi space, indicating potential future developments. Schwartz, who was previously COO at Curv—a crypto custody firm acquired by PayPal in 2021—highlighted Munich Re’s experience from past collaborations.
“The policy protects against external cyber threats and attacks that could compromise the platform, as well as internal fraud or employee collusion,” explained Schwartz. “Munich Re is not involved in smart contract security but is engaging with key DeFi players, focusing on private key security and wallet integrity.”
Regarding smart contract risks, Sarah Downey, blockchain lead at Lockton’s Emerging Asset Protection (LEAP), mentioned that the insurance industry is evolving positively. Notable market participants include Chainproof, offering coverage for technical failures in code, and Nexus Mutual, which provides a decentralized capital pool model.
