The $6.3 billion Binance hack has focused attention on how crypto insurance works. The report describes the theft as the world’s biggest crypto heist. The loss has drawn attention to how cryptocurrency exchanges insure digital assets, but policies differ according to storage methods, the way hackers gain access and each contract’s terms.
Reuters’ report describes digital asset insurance as a set of policies for exchanges, custodians and other companies facing theft, cyberattacks, technology failures and related business risks. The policies can address risks involving private keys, wallet security, smart contracts and custody systems.
How Crypto Insurance Works Across Different Policies
Underwriting remains a niche business, offered largely by specialist insurers in the Lloyd’s market and Bermuda. The report says limited regulation and volatile crypto prices have made insurers wary even as demand for protection has grown alongside cryptocurrency use and theft claims.
Coverage may combine several forms of insurance. Crime policies can address theft, social engineering and scams. Cyber liability can cover breaches, regulatory response and some related costs. Errors and omissions policies may address software bugs or smart contract failures, while directors and officers coverage concerns lawsuits against executives.
Technology liability can apply to infrastructure providers. The policy mix matters because standard insurance may not cover the value of stolen cryptocurrency. Most traditional crime policies were designed for physical property such as cash, securities and precious metals. Traditional cyber policies also do not always cover stolen digital assets.
What Happens When Coverage Falls Short
After a hack, an exchange may rely on insurance payouts, its own capital and emergency funds set aside for customers. The amount an insurer pays depends on policy limits, deductibles and exclusions. If losses exceed insured amounts, the company must turn to its financial resources or other recovery arrangements.
Binance established the Secure Asset Fund for Users, known as SAFU, in July 2018. The report says Binance describes it as an emergency reserve for extreme cases, including security breaches or platform-level incidents. As of 2026, the fund held crypto assets worth roughly $1 billion, entirely in bitcoin, according to Binance’s website.
The report said Binance did not immediately respond to Reuters’ request for comment on its insurance coverage. It does not state that insurance covered the $6.3 billion loss, nor does it establish how much of any loss could be recovered through the fund.
Claims can turn on how a breach happened, which systems were compromised and whether the loss fits the policy. Insurers may review controls for private keys, wallet access and transaction approvals. Whether an external hacker stole credentials or an employee deliberately transferred assets can affect which policy applies.
Exclusions and Security Controls Shape Claims
Policies can exclude value fluctuations, fraudulent acts by the policyholder, or unsecured and negligent key management. Such terms can narrow protection and make coverage harder to obtain. A policy’s stated limit alone therefore does not show what a company would receive after a specific incident.
Jacqueline Quintal, Marsh’s financial institutions and digital asset industry leader, told Reuters that digital asset firms and institutional clients need to understand what is covered, along with exclusions and sublimits. She said technology and security controls, strong governance and financial strength are also important given the gap between possible losses and available insurance capacity.
The report gives no single policy formula that guarantees reimbursement. Exchanges must examine the exact wording and determine whether a loss falls within coverage; claims review turns on the breach, the systems involved and the controls in place.
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