December 20, 2022
The repercussions of FTX’s demise continue to persist throughout the cryptocurrency market, with insurance companies being the most recent group to minimize their business with cryptocurrency firms and traders who had relationships with FTX.
Many digital currency traders and exchanges are now uninsured against losses caused by hacks, theft, or lawsuits, as insurers propose new policy exclusions for any claims related to the FTX scandal in order to protect themselves from further fallout, according to Reuters.
As a result, specialists in the Lloyd’s of London and Bermuda insurance markets are now requiring companies with whom they do business to report on their exposure to FTX, and they are using that information to potentially deny or limit coverage.
Furthermore, various insurers have begun to take distinct approaches to companies with FTX exposure. One has required clients to complete a questionnaire about their involvement in the bankrupt exchange. These include whether they purchased FTX or held assets on the exchange.
Meanwhile, the Securities and Exchange Commission (SEC) has filed civil charges against FTX founder Sam Bankman-Fried for his alleged complicity in illegal practises at his firm, as well as for intentionally concealing those acts from investors and the public.
The sources for this piece include an article in Reuters.
