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SC Ventures, Standard Chartered’s venture-building and investment arm, and Japan’s SBI Group have joined crypto insurer Soter Insure’s Series B financing, adding banking-sector investors to a round led by Galaxy. Soter announced the second close Thursday, saying the funds will help it offer more insurance for financial institutions handling digital assets.
The second close also includes another investment from Token Bay Capital, which backed Soter in its Series A, according to the company announcement. Coinbase Ventures, Franklin Templeton and Brevan Howard Digital participated in the round’s first close, announced in July.
Insurance for institutions holding crypto
Soter is headquartered in Abu Dhabi and operates out of Bermuda, with offices in London, New York and Dubai. Its business is insurance for financial institutions operating in digital assets, rather than a cryptocurrency exchange or a fund buying tokens for investment returns.
The company lists coverage for directors and officers, professional indemnity, crime, specie, slashing and smart-contract failure. It offers policies denominated in traditional currencies as well as native digital assets. CoinDesk reported that Soter insures against losses from theft, hacks and software failures, including policies funded in bitcoin or ether that pay claims in the same currency.
That currency matching is central to its approach. Founder and CEO Henson Orser told CoinDesk that bitcoin and ether raised by the company fund insurance programs denominated in those currencies, rather than general operating expenses.
Funding figures need a distinction
Thursday’s announcement did not disclose a dollar amount for the second close. Soter’s July 29 first-close announcement said the final Series B close would bring total funding to date to $23.5 million plus more than 500 bitcoin and 2,000 ether. That earlier statement describes cumulative funding, not the size of Thursday’s investment alone.
CoinDesk’s Thursday headline put dollar funding at $23.5 million, while its article text cited $23 million plus the cryptocurrency backing and valued the combination at about $66 million using token prices at the time. The figures should not be read as a newly announced $66 million cash investment from SC Ventures and SBI. Orser told CoinDesk that the crypto portion supports native-currency insurance programs; its dollar value changes with token prices.
What the new investors bring
Galaxy is a digital-assets and AI-infrastructure company whose businesses include institutional markets, asset management and blockchain infrastructure, according to its company website. Its role here is as lead investor, not the insurer issuing policies. Soter’s July announcement said Galaxy Digital led the Series B first close after also leading the Series A. Galaxy President and Chief Investment Officer Chris Ferraro described insurance as a gap in institutional digital-asset adoption. Neither announcement disclosed Galaxy’s individual investment amount.
SC Ventures is Standard Chartered’s innovation, fintech investment and venture-building platform. SBI Group is a Japanese financial group with securities, banking, insurance, asset-management and crypto-asset businesses. Their participation adds traditional financial-sector backers to the Galaxy-led investor group; the announcement did not disclose individual investment sizes.
Token Bay Capital, which invested again at this close, is a venture firm focused on digital-asset infrastructure such as custody, trading, payments and tokenization. Soter said it would use the proceeds to increase insurance capacity, strengthen underwriting and technology, and expand across Asia-Pacific through its Hong Kong presence, Europe and the United States.
Orser framed the financing as an answer to a shortage of risk protection for institutions. “Banks can’t scale in digital assets without the risk protection they rely on everywhere else, and today that protection is still scarce,” he said in Soter’s announcement.
The immediate business development is an expanded investor group and planned underwriting growth, not a guarantee that every digital-asset loss will be covered. The coverage available to a customer depends on the policy and the risk being insured.
JBizNews Desk | New York
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