Mitsui Sumitomo adds a new insurance product aimed to protect cryptocurrency assets from hacker attacks. Claim payments may reach as much as $8.85 million.

The new insurance was developed in cooperation with Japanese bitcoin exchange bitFlyer. Depending on the policy, insurance claims range from 10 million to 1 billion yen (from $88,500 to $8.85 million), Nikkei reports.

The insurance would cover damage and losses caused by hacker attacks, unauthorised access and other cyber threats, as well as human factors including employees’ mistakes. It also covers such expenses as notifying customers about the incident and dealing with international lawsuits. Currently, the product is available only for companies working with bitcoin.

The insurance premium will be calculated based on the exchange’s fee income and vary from several hundred thousand to several million yen. Although there are similar insurance products offered in other countries of the world, it will be the first one available in Japan.

Previously, insurance companies were not keen to work with bitcoin due to high risks associated with the cryptocurrency sector. However, the growing demand and interest in cryptocurrencies prompted the Japanese insurer to come up with a related product.

In 2014, the bitcoin community faced the collapse of Tokyo-based Mt. Gox exchange, then the largest bitcoin trading platform in the world controlling more than 70% of all transactions.

In August 2015, the venture fund owned by Mitsui Sumitomo invested in the bitcoin exchange bitFlyer. Currently, the monthly volume of transactions on the largest bitcoin exchange in Japan exceeds 100 billion yen ($885.1 million).

Japanese investors show growing confidence in fintech startups, developing cryptocurrency and blockchain technologies. According to the market research firm Seed Planning, by the end of 2017, the volume of bitcoin transactions on exchanges accepting Japanese yen will quadruple.

Elena Platonova