Consultations:
Cryptocurrency experienced a 61% increase over the past two years, with an estimated 59.1 million Americans owning some form of the digital currency, according to a recent survey commissioned by Finder.com. However, despite being a more secure form of payment, cryptocurrency isn’t without its vulnerabilities.
Over the past few years, cryptocurrency has been the focus of several costly lawsuits involving allegations of fraud, misconduct and noncompliance with security laws. Digital currency has also been at the center of civil lawsuits brought by investors alleging breach of contract, intellectual property infringement, trade secret misappropriation, etc.
In fact, it’s not uncommon for civil and criminal actions to be brought against directors and officers simultaneously. Unfortunately, despite careful diligence, any business that operates with cryptocurrency has a potential liability exposure that could lead to court action that personally names its firm’s executives and board members in a lawsuit.
Not every business has the financial resources to defend their directors and officers over management decisions that lead to a costly lawsuit. Having a D&O insurance policy can help mitigate this risk. D&O insurance is also helpful for startups that are trying to secure funding from investors, as well as companies looking to attract qualified directors and executives who may think twice about putting their personal assets at risk without some type of protection in place.
Conclusion
From initial coin offering delays to trade litigation and disputes/conflicts over digital contracts and conversion, lawsuits involving cryptocurrency are increasing. A D&O insurance policy can help mitigate these risks in the event a claim is brought against a firm’s business owners, executives or other leaders.
Today, the rise in the value of cryptocurrency is garnering increased interest and has great potential to generate profits for the right company. To learn more about how D&O insurance can help protect your business, contact the experts at Oakwood D&O. We have over 15 years of experience specializing in all aspects of management liability, with an ardent focus on directors and officers.
Get in touch – email Eli Solomon, CEO, at eli@oakwooddno.com or call (323) 686-7519.
You can also follow Oakwood D&O on LinkedIn.
