M2 Recovery has launched an insurance policy, marking the initiative to cover legal expenses associated with reclaiming stolen crypto assets.
In 2023, crypto crime surged to unprecedented levels, with blockchain transactions worth a staggering $20.6 bn impacted by criminal activities.
The number of affected transactions doubled compared to the previous year, underscoring the alarming rise in crypto asset investment fraud (see How Crypto Insurance Coverage Helps Mitigate Against Losses).
Victims facing such scenarios encounter significant financial burdens in their pursuit to recover stolen assets.
Investigations and recovery efforts can incur costs upwards of £250,000, often requiring the engagement of litigation funders who demand substantial cuts from any recovery, according to FATF Updates Guidance on Virtual Crypto Assets.
In response to this pressing need, M2 Recovery has launched a crypto legal expenses policy. Designed to provide coverage for crypto assets valued at more than £250,000, this policy aims to offer protection against the escalating threat of crypto fraud.
Our insurance policy is the first of its type globally, which provides policyholders with legal expenses following crypto fraud. We can insure legal expenses relating to crypto assets collectively worth tens of millions for investors, neobanks and in-play betting companies
Neil Holloway, M2 Recovery founder
This includes digital assets invested through the metaverse, utility tokens such as Freeway Tokens, and crypto assets appropriated through man-in-the-middle attacks. And with more investment scams in play than ever before, reducing exposure to risk on large crypto investments has never been more important (see about Underwriting Crypto Assets: New Forms of Insurance Coverage & Losses).
Investors purchasing the policy gain access to M2 Recovery’s top-tier in-house legal team for asset recovery. The policy also covers the expenses incurred during the recovery process.
McGill and Partners, a renowned global boutique specialist re/insurance broker, collaborated with M2 Recovery in crafting and securing placement for the policy with Lloyd’s of London insurers, facilitating the product launch.
The issue of fraud and loss of assets is a growing problem in the crypto world, and we’re delighted to be working with M2 Recovery on this pioneering solution, offering pre-incident crypto legal expenses insurance
Paul Morgan, Partner in the Financial Lines team at McGill and Partners
The threat to crypto assets has never been greater, with cyber criminals becoming increasingly sophisticated in how they act (see New Trends in the Use Crypto by Criminals).
M2 Recovery have built a team of cyber intelligence specialists, recovery agents, forensic investigators and expert lawyers, all working under one roof with proprietary technology to combat this fraud.
by Peter Sonner
