Insurance gaps in director liability, custody, and wallets often surface only after crypto firms relocate, warns Relm’s global distribution chief.
Dubai has become a focal point for European crypto firms seeking to relocate following the transitional deadline of Europe’s Markets in Crypto-Assets (MiCA) regulation on July 1, 2026. However, Christian Ogden Davies, Global Head of Distribution and Innovation at Relm, a Bermuda-licensed specialty insurer, cautions that moving a company’s headquarters does not eliminate its regulatory obligations. Firms that continue to serve European clients must comply with both MiCA and local regulations, such as those set by the Virtual Assets Regulatory Authority (VARA).
Understanding Regulatory Obligations
Many founders mistakenly believe that obtaining a VARA license exempts them from MiCA requirements. Ogden Davies emphasizes that firms still engaging with European users are subject to both regulatory frameworks. This dual obligation can lead to significant gaps in insurance coverage, particularly in areas like director liability, custody, and wallet infrastructure. Founders often assume that a single “crypto insurance” policy will suffice for all scenarios, from hot wallet theft to regulatory investigations, which is rarely the case.
Insurance Capacity in the Gulf
The Gulf region’s specialist insurance capacity is currently insufficient to accommodate a large influx of European crypto firms. According to Ogden Davies, few insurers possess the necessary understanding of digital asset risks to provide meaningful coverage. While the market is evolving, firms requiring larger insurance limits may still need to seek additional capacity from international markets. Companies that are well-governed and can clearly articulate their risk profiles will be better positioned than those relying solely on relocation.
Identifying Coverage Gaps
Founders often discover that insurance requirements differ significantly between jurisdictions. For instance, VARA mandates professional indemnity and directors’ and officers’ insurance, while MiCA has its own prudential and custody obligations. This discrepancy can lead to unexpected coverage gaps, particularly in areas such as cyber liability and cross-border coverage. Ogden Davies notes that many founders may believe they have adequate “crypto insurance,” but the reality is that their policies may not align with their business models or regulatory expectations.
As the regulatory landscape continues to evolve, collaboration between regulators and insurers will be crucial in addressing these gaps. Ogden Davies suggests that insurance can serve as an additional layer of oversight, providing regulators with insights into the operational risks faced by crypto firms. This partnership can enhance the overall confidence in the regulatory framework, ensuring that businesses are not only licensed but also adequately protected.
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