Custodian Risk Cover
Covered risks
Custody Cover protected against:
Custodial wallet hacks where you lose more than 10% of your funds
The custodian halting withdrawals for more than 90 days
Cover wording
Where the Policyholder is a User of the Designated Custodian, the mutual may pay a claim;
if the Designated Custodian;
1.1. is the victim of a Crime that occurred or was first discovered during the Cover Period and the Designated Custodian announces that all Users of the Designated Custodian have to take a loss on their current holdings of 10% or more of face-value; or
1.2. completely prevents all their Users from withdrawing funds without prior notice and withdrawals are prevented for a continuous period of 90 days or more where withdrawals were first halted during the Cover Period; and
if the Policyholder grants any reimbursement received from the Designated Custodian to the Mutual.
Recoveries
If the Designated Custodian provides any reimbursement to its Users then the Pramb is entitled to seek recovery of any reimbursement received from any Policyholder who has been paid a claim up to the value of the claim amount paid.
Exclusions
The Pramb does not provide Cover if the Policyholder is the Designated Custodian, a representative of the Designated Custodian, or an entity or individual that is related to the Designated Custodian,
Definitions
Cover Amount means the amount of Cover specified by the Policyholder at the purchase of Custody Cover.
Cover Period means the period of time, in days, that a Policyholder is protected under this Cover. This is chosen by the Policyholder when purchasing Cover and stated in the Smart Contract Data.
Crime means the criminal, fraudulent, or dishonest taking or appropriation of cryptocurrency assets to the deprivation of the Designated Custodian by any person that occurred or was first discovered during the Cover Period.
Designated Custodian means the business or entity responsible for the safekeeping of the private keys to cryptocurrency assets on behalf of their Users. The cover is provided against a specific Designated Custodian that is selected by the Policyholder when the cover is purchased.
User means a customer of the Designated Custodian’s services who relies on the safekeeping of private keys to cryptocurrency assets.
Without Prior Notice means Users of the Designated Custodian are not given any advance warning that withdrawals are going to be halted that would allow them to withdraw funds before withdrawals are halted.
Reimbursement means either an in-house cryptocurrency asset, a tokenized scheme, or any other monetary means that the Designated Custodian gives users in lieu of the lost cryptocurrency.
Cover Termination
Cover ends when:
there has been a successful claim on the Cover that results in the entire Cover Amount being paid; or
the Cover Period specified at purchase has ended.
Claim Amount Guidance
The following guidelines shall be used by Members when deciding on claim amounts:
Claim payments should compensate the Policyholder against losses actually incurred and members should submit evidence of those losses. Evidence could include;
screenshots of cryptocurrency balances held in the Designated Custodian before and after any losses have been applied (if relevant); and/or
references to any relevant on-chain transactions showing funds being moved; or
other evidence as deemed appropriate; and
where the mutual is paying a claim;
under condition 1.1; the claim payment should compensate for the loss applied to the funds actually held in the custodian; or
under condition 1.2; the claim payment should compensate for the full value of funds actually held in the custodian; and
Where losses actually incurred are less than the Cover Amount a partial claim payment should be made if possible, otherwise a full claim payment of the entire Cover Amount should be made.
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