The U.S. Court of Appeals for the 4th Circuit held yesterday that a crypto theft is not direct physical loss.
In Sedaghatpour v. Lemonade Ins. Co., one of the relatively few recent coverage decisions addressing cryptocurrency, the court considered a theft claim of over $170,000 in cryptocurrency stored in a “hot wallet,” an internet-connected cryptocurrency platform. The court concluded that there is no coverage for that loss, applying Virginia law.
Read the opinion here.