Report: Korean Insurer Denies Claim from Bankrupt Crypto Exchange

Insurance
29 March 2018

South Korean cryptocurrency exchange Youbit has reportedly had its insurance claim denied months after it closed following a debilitating hack.

In December, Youbit declared bankruptcy after suffering twin hacks over the course of 2017, including one that officials suspected at the time could be traced to North Korea. The second attack, which Youbit said resulted in the loss of “about 17 percent of total assets,” led to the exchange’s closure.

According to a report from the Wall Street Journal Thursday, the exchange filed a claim through a policy it is said to have obtained weeks before the second hack. However, DB Insurance Co., one of South Korea’s major property-and-casualty insurers, denied the claim, a spokesperson confirmed to the news source.

While the insurance firm didn’t provide a reason for the rejection, Yapian, the operator of the exchange, claimed “DB Insurance had accused it of trying to rush getting its insurance and failing to disclose important information while negotiating the policy.” the Journal writes. Yapian reportedly hit back, saying DB Insurance is using the allegations as a pretence not to pay out on the claim.

Amid the exchange’s post-closure difficulties, investigators reportedly continue to probe the circumstances behind last year’s attacks, with a focus on North Korea or actors that may be backed by the reclusive regime.

In a separate report Thursday, the Journal, citing unnamed sources, said the investigation is in its “infancy” and that a review of the malicious software employed during the incident is still underway.

Earlier this year, as per a report from Kyodo News, intelligence officials in South Korea briefed lawmakers on North Korea’s suspected role in a series of hits on exchanges, including one on Japan’s Coincheck exchange that saw over $530 million-worth of cryptocurrency stolen.

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