Users of HashKey Hong Kong will soon be able to receive insurance protection on digital assets custodied on the platform.
According to local news reports on Sept. 6, HashKey has signed a memorandum of understanding with fintech firm OneDegree for insurance coverage on exchange wallets. The insurance policy will apply to both hot wallets and cold storage addresses.
Xiaoqi Weng, chief operating officer of HashKey, said the firm seeks to “improve the financial, technical and service infrastructure to provide customers with more comprehensive protection” and expand its contribution to Hong Kong’s digital asset ecosystem. Yanlin Guo, co-founder of OneDegree, said cryptocurrencies require a “strong framework including insurance to identify and mitigate all potential risks."
On Aug. 3, HashKey became the first cryptocurrency exchange to receive a regulatory license from Hong Kong’s Securities and Futures Commission to offer services to retail investors. On Aug. 28, the exchange debuted trading services, although its volume remains somewhat low, with only $122,514 worth of crypto changing hands in the past 24 hours.
Currently, users can only trade Bitcoin (BTC) and Ether (ETH) on HashKey Hong Kong. Neither margin trading nor crypto derivatives trading is available. The exchange supports U.S. dollar and Hong Kong dollar fiat deposits from authorized financial institutions worldwide.
Exchange user insurance has been a matter of significant controversy within the industry. Some exchanges do not provide users with insurance protection, except for a simple contractual claim to their assets in the event of bankruptcy. Other exchanges only offer insurance on users’ fiat deposits, while some, such as Binance and Bitget, provide insurance programs that cover crypto-related incidents.