Fordefi, a company specialized in crypto wallets for DeFi, has secured insurance coverage against crimes and cyber threats thanks to Munich Re, a major German carrier.
The policy, with an unspecified value in dollars, was orchestrated with the assistance of blockchain experts from Lockton’s Emerging Asset Protection team, an insurance broker. Below we see all the details.
Summary
The strategic partnership with Munich Re ensures the protection of Fordefi’s digital crypto wallets
As anticipated, Fordefi, a crypto wallet designed for decentralized finance (DeFi), has formed a partnership with the German insurance giant Munich Re. As announced by the companies in a blog post.
The Fordefi wallet policy, which covers cyber attacks, internal fraud, and collusion, was facilitated by the insurance broker Lockton based in Kansas City. This is in contrast to protection based on smart contracts.
It is emphasized that the amount of coverage in dollars has not been disclosed.
However, in addition to the general coverage offered for the Fordefi portfolio – which leverages intelligent key sharing features such as multi-party computation (MPC) – customers have the opportunity to increase coverage individually through Munich Re.
The growing range of decentralized and on-chain trading platforms in the DeFi has been described as a “hacker’s playground.” Making it a challenge even for insurers more focused on digital assets.
Protecting private keys and wallet components
Regarding this, the CEO of Fordefi, Josh Schwartz, stated that the new product has naturally sparked interest from Munich Re in further exploring the DeFi arena. Furthermore, further developments are expected to come.
Schwartz, previously chief operating officer of Curv, a cryptographic custody company acquired by PayPal in 2021, was one of the first to collaborate with Munich Re.
Schwartz stated in an interview that the policy covers external cyber threats and attacks that could compromise the platform, as well as internal fraud or collusion among employees.
Munich Re is not involved at the smart contract level. However, they are engaging with active participants in DeFi, starting from a framework they consider secure. Namely, the protection of private keys and wallet components.
On the front of risks related to smart contracts, Sarah Downey, blockchain manager of Emerging Asset Protection (LEAP) at Lockton, stated that the insurance sector is progressing in the right direction.
In terms of solutions available on the market, Chainproof offers coverage to DeFi users for technical code failures. On the other hand, there is the decentralized approach of the capital pool created by Nexus Mutual.
The previous $10 million funding round of Fordefi
Fordefi aims to bring web3 wallets into the financial mainstream.
So, recently, it successfully completed a strategic funding round of 10 million dollars, defined as a seed extension after the recent 18 million dollar round.
This time, Electric Capital led the round, with Paxos Trust Company and Alchemy among the new investors.
With this new injection of capital, Fordefi aims to further develop its wallet-as-a-service (WaaS) offerings. In particular, focusing on providing self-custody wallets for institutional investors directly through their applications.
The company has already made significant progress in becoming one of the leading providers of MPC wallets for this market segment, with prominent clients such as Flare Network, DeFiance Capital, and Pantera Capital.
Fordefi’s products are already integrated with the Ethereum, Cosmos, and Solana ecosystems. This facilitates multi-chain compatibility and records an on-chain transaction volume of over 3 billion dollars to date.
With the web3 industry and digital assets in full growth, Fordefi is preparing to offer additional secure self-custody wallet services in collaboration with institutional partners.
The company aims to expand its portfolio and security infrastructure, thus consolidating its competitive advantage in the sector.
