coindesk.com
Standard Chartered’s venture arm and Japan’s SBI Group have invested in cryptocurrency insurer Soter Insure, joining a funding round expected to bring the company’s total backing to $23 million plus more than 500 $BTC ($38.4 million) and 2,000 $ETH ($4.5 million).
The investment takes Soter's Series B raise to around $66 million based on bitcoin and ether's current prices.
SC Ventures and SBI joined the Galaxy-led round, whose earlier investors included CoinBase Ventures, Franklin Templeton and Brevan Howard Digital, Soter announced on Thursday.
The investment comes as bank and asset managers increase their use of cryptocurrencies but face the risk of losing millions to hacks, theft and software failures. Soter sells insurance against those potential losses, including policies that pay claims directly in bitcoin or ether rather than dollars.
"Any $BTC or $ETH we have raised along the way has been used to fund insurance programs denominated in that native currency and not as working capital in the general operating account," Soter founder and CEO Henson Orser told CoinDesk.
Orser said the company can insure losses of up to $5 million, 200 $BTC or 2,000 $ETH, using its own assets. For larger policies, it works with other insurers to share the risk. Those funds are kept in separate accounts and held in cold storage at regulated custodians, he added.
Abu Dhabi-based Soter operates under a Bermuda insurance license that allows it to insure risks in cryptocurrencies as well as traditional currencies. Its bitcoin and ether insurance programs are funded with the same currencies used to pay claims.
Soter also received full license approval from Dubai's financial regulator, adding to its regulated operations in Bermuda. The company, headquartered in Abu Dhabi, has offices in London, New York and Dubai.
The investment follows Binance's $6.3 billion hack on Oct. 29 and a reported $133 million theft involving French bank Crédit Mutuel Arkéa.
"We've seen a slight hardening in the market for crime through the latest incidents, but the market is still evolving," Orser said, referring to rising insurance prices for theft-related losses.
The insurer also acknowledged that the industry has yet to settle how policies should treat losses caused by autonomous AI agents, which can execute transactions on behalf of users.
