Mitsui Sumitomo Insurance, a Japanese insurance holding company headquartered in Tokyo, is developing an insurance product in collaboration with Japanese bitcoin exchange operator bitFlyer, which will cover losses and damages at bitcoin exchanges, Nikkei Asian Review reported.
The product will provide protection to exchanges as well as their customers. It will offer total coverage, ranging from 10 million yen to 1 billion yen, against damages and losses resulting from cyberattacks, unauthorized accesses, as well as mistakes and impropriety by employees.
In addition, the insurance product, the first-of-its-kind in Japan, will pay for the costs of dealing with problems such as informing customers of an incident and handling damages suits from outside Japan. The insurance premium is calculated on the basis of the exchange’s commission revenue.
While bitFlyer is Japan’s top bitcoin exchange with monthly transactions exceeding 100 billion yen, its domestic peers operate on much smaller scales and do not have the resources to deal with large damages which run into millions. Their customers face the risk of not being fully compensated in the event of a loss and the new product may help alleviate such concerns among bitcoin users.
Earlier in April, bitFlyer raised 3 billion yen in a Series C funding round led by Venture Labo Investment and SBI Investment, which followed its funding round last August in which it raised 510 million yen drawing support from Dentsu Digital Holdings, Mitsubishi UFJ Capital Co, Mitsui Sumitomo Insurance Venture Capital Co and Venture Labo.
In May 2016, the Diet in Japan approved a bill to regulate operators of virtual currency exchanges in the country, in order to help ensure better protection of users. The Cabinet had earlier approved the bill on virtual currencies that treat them as “asset-like values that can be used in making payments and be transferred digitally”.


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