Recently, it seems that regulatory steps have accelerated in the crypto asset market in Asia. While important centers such as Hong Kong, Singapore and South Korea are tightening the management structures of relevant platforms and asset managers, new regulations are being put into effect that cause increased personal responsibilities on senior managers.
Changing responsibilities in the management structure and the need for insurance
Fundamental changes in the field of digital asset management have brought to the fore an approach that expects companies’ board members and senior employees to provide more regular and transparent oversight. Increasing personal responsibility of directors and managers also leads to dynamism in the insurance field.
With the new practices that will come into force in Hong Kong by 2025, the senior management of virtual asset platforms will have clearer obligations in the safekeeping of customer assets. With the instructions sent to licensed exchanges, the emphasis on safe storage of assets, internal controls and effective surveillance came to the fore.
There is also debate in Hong Kong about whether platforms can only deposit assets with institutions under the supervision of domestic regulators, or whether they can also use unregulated or overseas depository institutions. It becomes important whether insurance companies will provide insurance based on strong control and protection standards that ensure that assets are stored safely.
Singapore has also increased its supervision of platforms, especially those serving overseas customers, with licensing rules that come into force in 2025. One of the main conditions for licensing is to demonstrate the competence and knowledge of key managers. Management’s good understanding of the regulations and effective control practices in operation have become a priority. In this context, Executive and Board Insurance (D&O), which also secures the personal assets of direct managers, has become one of the basic elements of risk management.
The new law planned in South Korea and its possible effects on the industry
In South Korea, it is aimed to create a comprehensive legal framework for the market with the Digital Asset Basic Law, which was submitted to the National Assembly in 2025. Within the scope of this law, asset issuance, transaction rules and new governance standards are brought to the agenda. Innovations in governance, especially regarding delisting processes, are noteworthy.
With the new regulations, the compliance obligations of the platforms will increase significantly. D&O insurance plays a more critical role for managers and senior employees against possible litigation, regulatory audit or sanction risks. These steps taken in the axis of Hong Kong, Singapore and South Korea have created a market environment in which controls have tightened throughout the region and expectations for managers have increased.
All these developments require companies to proactively review their management structures and custody and insurance programs. While D&O insurance in the crypto asset space is no longer a secondary option, it is emerging as one of the key protection tools in the current regulatory environment.
