In this Risk Recap
- The Btc Turk Event
- What This Means for Crypto Insureds and Their Insurance Brokers
- What This Means for the Digital Asset and Web3 Industry
The BtcTurk Event
On August 14, 2025, the biggest and longstanding Turkish crypto exchange, BtcTurk, experienced an estimated $48 million in unauthorized outflow.
The web3 security company Cyvers, a trusted partner of Relm and customers who purchase our Digital Asset and Web3 crime product, VISTAWEB3, were the first to report on this after flagging the suspicious transfers. This attack has been consolidated to two addresses, where the hacker converted these assets across multiple channels. A large percentage of these assets were funneled through Ethereum.
BtcTurk responded to the alert from Cyvers by halting all deposits and withdrawals for a prolonged period whilst an investigation gets underway. This response of halting operations is a protective measure to prevent the defaulting of the crypto exchange.
Agio Ratings, who assess digital asset risk on an hourly basis, have highlighted that BtcTurk’s risk of exchange default in the next year has increased by 0.39% over the past week, likely due to the suspicious outflow, and currently sits at a risk of 13.28% as of August 27, 2025.
For context, over 60% of the 48 exchanges monitored by Agio Ratings currently register under a 10.31% risk of exchange defaulting. It is likely that there will be developments in BtcTurk’s stability over the coming weeks.
What Does This Mean for Crypto Insureds and Their Insurance Brokers?
This loss of funds and prolonged halting of account withdrawals will likely cause institutional users of crypto exchanges heightened concern regarding the volume of crypto they are holding on a crypto exchange at any one time. In addition, they may look to more sophisticated quantitative methods of risk management to mitigate the risk of lost funds resulting from an exchange default, using innovative solutions like Agio Ratings. Informed decisions can then be made whether to accept or transfer this risk off the balance sheet using products like FALTAWEB3 to provide additional business and customer confidence.
This is not the first hack BtcTurk has encountered, occurring just over a year since they experienced a cyber-attack in June 2024 resulting in $55 million of unauthorized withdrawals from a handful of hot wallets. Other notable crypto exchange hacks include Bybit and Nobitex during this year alone.
Claire Davey, Relm’s Head of Product Innovation and Emerging Risk said, “These events serve as a reminder that security risks and the risk of exchange default is persistent and global. In this context retail and institutional users of crypto exchanges are looking for greater certainty that their funds will be honoured and reimbursed — akin to FDIC arrangements in the US or FCSC in the UK. This increasing market pressure is prompting some crypto exchanges to obtain a competitive advantage by offering an insurance-backed guarantee regarding reimbursement of funds in the event that a significant loss of funds occurs, either through a network security breach or insolvency event.”
What Does This Mean for the Digital Asset Industry?
The recent $48 million BtcTurk breach underscores the fragility of crypto exchanges and the persistent threat posed by cyberattacks in the sector. With operations still suspended and default risk indicators climbing, this incident highlights the urgent need for stronger safeguards and innovative risk management tools. As institutional and retail participants grow increasingly wary of exchange solvency, solutions like real-time risk ratings and insurance-backed protections are likely to become essential components of digital asset markets. Ultimately, these events serve as a stark reminder that trust, transparency, and security remain the cornerstones of long-term stability in the evolving crypto ecosystem.
For more information on Relm’s insurance solutions for digital assets and web3, contact us.
