UAE firms can now access custodial risk insurance
The insurance aims to protect Web3 exchanges, asset managers, and custodians against risks such as hacking, internal fraud, and damage to storage systems.
The Central Bank of the United Arab Emirates (CBUAE) has approved a new product offering custodial risk insurance for digital asset platforms, developed by Hong Kong-based OneDegree in partnership with Dubai Insurance. Available under the brand “OneInfinity,” this insurance aims to protect Web3 exchanges, asset managers, and custodians from the risk of losing customer funds, including through hacking, internal fraud, or damage to storage systems.
According to Robin Scott, general manager of OneDegree in the Middle East, the introduction of custodial risk insurance brings a layer of protection similar to deposit protection schemes in traditional banking. It allows crypto platforms to offer peace of mind to clients by ensuring their assets are safeguarded. Many global regulators, including those in the UAE, are making such insurance mandatory to prioritise consumer protection.
The CBUAE’s approval marks the first time UAE-based companies can obtain custodial risk insurance locally, which is expected to draw significant interest as more firms seek licences to operate in the region. OneDegree and Dubai Insurance have already started issuing policies to UAE clients and anticipate high demand for the product.
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