M2 Recovery has today launched an insurance policy designed to cover the legal costs associated with recovering stolen cryptocurrencies.

Crypto crime hit a new all-time high in 2023, accounting for a record-setting US$20.6bn worth of blockchain transactions last year, with the number of blockchain transactions affected by criminal activity doubling compared with 2022.

M2 estimates that it can cost upwards of £250,000 to investigate and recover lost crypto assets. If it is possible to find a litigation funder willing to act purely on a contingency basis, it will likely require a significant portion of the value of any recovery.

M2 Recovery founder Neil Holloway said: "Our insurance policy is the first of its type globally, which provides policyholders with legal expenses following crypto fraud. We can insure legal expenses relating to crypto assets collectively worth tens of millions for investors, neobanks and in-play betting companies.

"This includes digital assets invested through the metaverse, utility tokens such as Freeway Tokens and crypto assets appropriated through man-in-the-middle attacks. And with more investment scams in play than ever before, reducing your exposure to risk on large crypto investments has never been more important."

Crypto investors buying a policy have access to M2 Recovery’s in-house legal team to recover the lost assets. The costs of recovery are also covered by the policy.

McGill and Partners and Lloyd’s assisted in the design and placement of the policy.

Paul Morgan, partner in the financial lines team at McGill and Partners commented: “The issue of fraud and loss of assets is a growing problem in the crypto world and we’re delighted to be working with M2 Recovery on this pioneering solution, offering pre-incident crypto legal expenses insurance. That we’ve been able to work in partnership to develop a solution that responds to a pressing need, emphasises the agility we have as a business to respond quickly and in a way that meets the pressing needs of the marketplace more widely.”

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