KODA Doubles Digital-Asset Custody Insurance Coverage to $40 Million

KODA, the digital-asset custody company also known as Korea Digital Asset, said on August 3 that it signed a digital-asset insurance contract with KB Insurance covering up to $40 million.

The agreement doubles KODA’s insurance coverage limit from $20 million to $40 million, the largest such coverage in South Korea’s digital-asset custody industry.

The policy compensates for losses if digital assets held in custody by KODA are damaged, lost or stolen. Last year, KODA said it became the first company in the industry to add optional insurance on top of legally required coverage. It has now doubled that coverage limit within a year.

South Korea’s Virtual Asset User Protection Act requires custody providers to maintain insurance or reserves of at least $361,000. KODA said its new coverage limit is more than 100 times the legal minimum.

The industry expects institutional demand for custody services to grow as South Korea gradually permits corporate trading in virtual assets and discussions continue over the proposed Digital Asset Basic Act. That is prompting broader efforts to strengthen asset-protection systems.

Chief Executive Officer Cho Jin-seok said institutional clients first look at the size and scope of insurance coverage when choosing a custody provider. He said the increase lifts client asset protection another step closer to traditional finance standards and leaves KODA prepared to safely hold institutional funds once the corporate market opens.

A KB Insurance official said the agreement with the country’s largest custody provider reflects both the crypto market’s demand for higher protection and the insurer’s underwriting capabilities. The official added that the insurance industry’s role will continue to expand as digital assets move further into mainstream finance.

KODA said it plans to continue expanding its digital-asset insurance coverage in line with regulatory changes and market shifts.

Founded in 2020 by KB Kookmin Bank and Hashed, KODA provides custody services for institutional and corporate clients. The company said it holds more than 80% of South Korea’s digital-asset custody market. Last year, it also raised $7.2 million in a Series A round, bringing in Hanwha Investment & Securities, IBK Capital and Kyobo Securities as shareholders.