Yapian Corp., the operator of a crypto exchange called Youbit which was hacked twice, has been denied an insurance claim of about $2.8 mln for the last hack that occurred in December of an alleged seventeen percent of the company’s assets, as reported by the Wall Street Journal.
The security breach of mid-December of the South Korean bitcoin exchange, Youbit has led the firm to file for bankruptcy. It also has about 75% of clients’ holdings available to be withdrawn, and the rest was put on hold until the bankruptcy proceedings are concluded. The hack was linked to North Korean hackers. These hackers also attacked several other South Korean cryptocurrency exchanges.
This bitcoin exchange was formerly known as Yapizon and was hacked in the middle of last year.
The press release stated that the Insurance provider of Yapian, DB Insurance denied the company payout because of the failure of Youbit to disclose important information before buying the policy which the company views as an excuse to not pay out their claims.
The policy was filed on the first of December last year. A few weeks before the hack and covers up to $2.8 mln damages at the annual premium of $244,000.
Furthermore, the press release stated that cyber comprehensive insurance offers cover for eight risks, which include theft or data loss, information maintenance violation liability, cyber threat, personal information infringement damage, and network security liability.” The company’s insurance policy only covered five out of the eight including; “network security liability, information maintenance violation liability, and personal information infringement damage.”
The insurance company confirmed in a statement that it denied Youbit’s claim but has not given a reason publicly for this denial. WSJ also notes that Yapian is in the process of acquisition by Coinbin, a crypto wallet.
Digital currencies are quite popular in South Korea, and this number is expected to grow.